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Why is Developing An Employee Handbook Important to Your Business?

How to Write a Handbook?

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An employee handbook is important for your business; it helps you define your business and employee policies and procedures. How to write a handbook effectively? Use an employee handbook template and develop your policies for code of conduct, employee sick days, hours of work, training and development, and other policies and practices that are specific to your business.

Many businesses develop a handbook for their employess to communicate policies, procedures and general company information.

It is useful to put this information into one document - good for your business, your employees and to ensure alignment between the direction (encompassed in the handbook) you want your business to go, and the vision you have for your organization.

For employees, a handbook is a guide to what the business believes is important. For business owners, it is a method of producing a guide book on, and for, your business; it will help you document directions for your employees.

Managing a small business requires understanding that your people are your most important resource.

Why Write an Employee Handbook?

Some small business owners may think it's not as important to develop a handbook for a small number of employees.

However, it is necessary for the success of all businesses with employees; for businesses without employees but with contract workers, it is still important to provide reference and details in terms of your expectations and how you want your business to be operated.

If you don't develop a handbook, it is highly likely that you will be challenged to resolve human resources issues that arise; because you will not have laid a foundation or structure to deal with those issues.

How to Write a Handbook?

An Employee Handbook Template: Sample Outline:

  • Table of Contents
  • A welcoming message from the business owner and the management
  • Organization Charts (one chart for each level of supervision)
  • Store, warehouse and/or manufacturing plant map and layout (if a physical business, versus an online business): this would include fire extinguishers, emergency exits, first aid stations, as well as main traffic areas and departments.
  • Description of what the business does: its reason for existence (e.g. it's in the automotive industry and is a business-to-business supplier of automotive parts)
  • Description of the business' value to its customers - this is really a belief statement
  • A statement of the Business' Values (e.g. honesty, integrity, ethical behavior)
  • The Vision Statement
  • The Mission Statement
  • A statement on the importance of employees to the business
  • A statement on the importance of customers to the business
  • General Comments and Expectations
  • Policies and Practices
    • Attendance and Punctuality Policy: The Importance of Reliability (and employee sick days and absenteeism)
    • Bereavement Policy
    • Communications Policy
    • Conflict of Interest Policy (check out a sample employee handbook policy)
    • Corrective Action Policy
    • Employee Code of Conduct
    • Discrimination and Harassment Policy
    • Drug and Alcohol Policy
    • Privacy Policy
    • Promotions Policy
    • Statutory Holidays
    • Vacation Policy
    • Safe Work Policy
    • Employee Training Development Policy
  • Procedures
  • Guidelines
    • Benefits Programs
    • Social Events
    • Termination Process, including common grounds or reasons for firing employees

Employee guidebooks need to be customized to the specific business and industry. You can use the above outline as an employee handbook template for drafting your own policies and practices, but make sure that you develop it to be consistent with the specific needs and direction of your own business and build it in alignment with your strategy and business plan.

If you have developed a strong business network, you may be able to ask for, and share, a sample employee handbook to help you frame what you need to do for your business. Contact your Industry Association to see if they have a copy of a handbook that you can reference.

Once you have written your handbook, have your lawyer review it to ensure that you are following the labor laws of your country and region. Depending on the laws in your country or region, you may wish to add one or more disclaimers (a disclaimer might be along the lines of "this handbook is a guide only and is not a complete list of expectations, practices, policies, etc.") - take the advice of your lawyer on these details.

Build your handbook to be a positive influence on morale, and to promote a positive culture; therefore write this book in a positive tone. Your employee handbook needs to be reliable, consistent, and provide fair guidelines for employees, as well as performance and expectations standards. Your handbook will be one of the retention strategies you can employ; keeping high performing employees by communicating clearly is a successful employee retention tip.

Review the employee handbook on an annual basis to ensure that it is up-to-date and to add new or changing policies (some employee policies or practices will evolve over time as your business evolves).

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Increasing New Employee Success

New employees have a better opportunity for success when you provide a strong orientation for them on day one.

But follow up on that orientation, make sure that they understand what's expected of them and that they have the training and the support to do well.

During the first week, set aside some time each day to check in with them and debrief; listen closely to what they have to say and see if they highlight areas of business or process improvement: sometimes new employees see things that existing staff just don't see anymore.

Be sure to communicate progress and expected results regularly. Provide a written summary performance review after the first month - not at the end of the probationary period - by then it may be too late. Make sure the summary provides both the good results and the areas for improvement - with feedback on how that improvement can be achieved.

Communicate the organization's plan for the future and how the employees contribute to those plans and mission.

Make sure that the culture of your organization is one that attracts the type of people you want working for you. Assess your environment objectively - or hire someone to come in and do an employee survey or assessment for you.

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Performance Evaluation Best Practices

Provide feedback regularly and consistently (and frequently for new employees or those that appear to be struggling).

Recognize good work openly and in front of other.

Consider poor performance as an area for improvement: focus on only one or two improvement areas at a time.

Provide employees with the opportunity for input into their evaluations - this should not be a one-way communication effort, rather it needs to be a two-way effort.

If there are action items that come out of the performance evaluation, and typically there need to be some goals or actions in each evaluation, then follow up - do not wait for a year to go by to check in.