The Employee / Policy Manual

Developing a marketing program is fun. Taking a customer to dinner is fun. Making a big sale is great fun. Writing an employee or policy manual is not fun. It is grueling work. Nevertheless, it is very necessary.

An employee manual provides two very useful purposes. First, it explains to your employees what all of your policies are - and I do mean all. Secondly, it provides protection for your business. If you have a well written manual which is properly distributed to all employees, no employee can ever say they "didn't know or didn't understand." Everything is spelled out in black and white.

Keep in mind that your employee manual is not written in stone. It can be changed often as new policies need to be implemented or existing policies need to be clarified or explained in more detail. Let's begin by discussing the first purpose.

I usually start the employee manual with general rules of employee conduct. I certainly can't list everything for every type of business in this posting, but I will provide some detailed examples. Suppose you start with your dress code. How do you expect employees to dress? You need to be very specific. What I think of as business casual may not be what you think of as business casual. If the last place you worked allowed you to wear jeans to the office, you may think of jeans as business casual. I, on the other hand, may think of business casual as a nice pair of dress slacks, a dress shirt, but no tie. That is why it is important to be specific.

Other items you should cover under the topic of employee conduct are:

• personal use of company property (computers, cell phones, office supplies, etc.)


• absenteeism


• tardiness


• altercations with other employees, vendors or customers and general disruptive behavior


• safety rules (depending on your business, this topic may be a separate section)


• employee theft


• sexual and other forms of harassment


• smoking


• use of alcohol and illegal drugs


• drug testing policy


• personal visits by friends or relatives


• illegal activities on company time and property

It is important to state what the penalty could be for violating a policy. I use the word "could" because your attorney may advise you to state it that way. For example, your manual may state, "Anyone absent three times in one year without a valid medical excuse may be terminated." If you substitute the word "will" for the word "may," then per your own policy, you would be required to terminate the individual. The word "may" provides an option. I am not an attorney and do not give legal advice so I suggest you receive legal counsel from your attorney on such matters.

A second section should cover employee compensation. You should discuss such items as:

• pay ranges for job classifications (this will depend on the size of your company)


• time frame for performance reviews


• types of pay raises - merit, length of service, etc.


• method used for determining commissions if they apply. This should include what happens if an employee starts the sales process but then quits or is terminated prior to the sale being completed. It should also cover split commissions, etc.


• overtime pay


• exempt versus non-exempt employees


• ..... and any compensation matter unique to your company

A third section should cover company benefits. List the benefits provided. Once again it is important to be specific. Do the benefits start on the first day of employment or do you have to be employed for 90 days? What family members are covered? What benefits are paid for by the employee? If an employee has used up all of her vacation time, can she take time off without pay? Remember, don't leave a chance for assumptions. List any common benefits that you don't offer. For example, if dental is not included, say so. This way there will be no confusion.

A fourth section should discuss performance reviews. Describe in detail when and how performance reviews are conducted. It is important to let employees know from day one that they will be evaluated periodically on a formal basis. And .... it is extremely important that you adhere to the schedule and procedure that you have outlined in the manual. If either changes, change the manual.

As I previously stated, depending on your type of business, you may need a separate section on safety. Some businesses will have sections that are unique to their industry such as customer record retention, locked file cabinets and desks, information that can or cannot be left on voice mail, email retention, shredding of documents, etc.

I think by now you get the idea. As I previously stated, I can't cover all policies for all types of industries. The important thing for you to remember is to cover everything you can think of and be specific. Here are two other important factors. First, do not distribute an employee/policy manual without first having it reviewed by your attorney. You need to make sure that none of your policies violate any types of laws। Second, when you distribute the manual, include a page which the employee signs and returns to you. The page should state that the employee has read and understands the content of the handbook. I always number my manuals and keep a log of them. I also include on the signature page the revision reference (A, B, etc.) and the day of the revision. Each time the manual is revised, I require the employee to sign another page stating that he received the manual and understands the contents. Of course, you have to give the employee adequate time to read the manual before returning the signature page.

The second purpose of the employee/policy manual is to protect the company। Here are two personal examples। I had a sales employee quit prior to a sale being completed. My manual stated that an employee had to be employed at my company when the sale was completed (including receipt of payment by the customer) in order to receive the commission. When she did not receive the commission, she filed a complaint with the state Department of Labor and Industry who began an investigation. I simply sent them a copy of the manual and her signature page to the Department of Labor and Industry. That ended the investigation. They said she had no basis for her complaint.

A second case involved an employee with one of my other businesses। He said a manager had promised him that he would receive a 10% raise at the end of his third month of employment. When he did not receive it, he sued my company in small claims court. When my manager had his turn to speak, he simply showed the judge a copy of our manual which stated that no one was eligible for a raise until they had been employed for six months. He also showed the judge the signature page. Case closed.

In both examples my company was protected by the manual। Had I not had those policies in writing and had I not had the employee sign the page stating that he/she understood the contents, I could have lost both cases। Both would have cost me time and money.

A good employee/policy manual can be a great friend to a business owner. No matter how busy you are, no matter how much you would rather do something else, make sure you have a comprehensive manual.

Please feel free to comment on this or any of our postings. Your suggestions for future topics are always welcome. Visit our web site at http://www.sentrabusinesssolutions.com/.