Why we need Policy Manuals
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"A policy is written to protect a company from
those who break the rules, not from those who follow them."
- Bryce's Law
In today's litigious society, a Policy
Manual (sometimes referred to as an Employee Handbook) is a wise investment for
any company, large or small. Let me give you an example, back when we were
developing products for the mainframe, our staff blossomed to 25 employees, a
small company no matter how you look at it. Like any startup company, our
interests in the early days were on product development, marketing, and
servicing our customers. As our company grew, we began to take on additional
consultants, developers and clerical personnel. We then began to notice people
taking advantage of our work environment, e.g., sick days, excessive doctor
visits, people began to dress sloppily, they were spending too much time
attending to personal affairs at the office, etc. It finally became obvious to
us that we needed a well written policy manual to bring conformity to our
operations and protect the company from abuse. We thereby devised a formal
Policy Manual, and had all of our employees read it and sign a statement they
understood its contents.
Policy Manuals may be common practice in
large corporations but it is also a shrewd investment for small companies. I am
still amazed that a small business such as ours needed to develop a Policy
Manual but I am certainly glad we implemented it for it has saved us on more
than one occasion from frivolous lawsuits brought on by former employees.
From the outset, understand this, a policy
is written to protect a company from those who break the rules, not from those
who follow them. In our early days, when there were just a handful of employees,
it was easy to monitor what everyone was doing and communicate our corporate
position to them. But as the company grew, it added a new level of complexity to
our communications making it harder to assure consistency in the conformance of
our rules. An employer would like to believe its employees will maintain the
best interests of the company. Regrettably, this is a naive concept as employees
normally put their own personal interests before the company's. If it was true,
there would not be a need for a Policy Manual. A Policy Manual, therefore, is
needed for those people who break the rules; for those who do not, it is a
WHAT SHOULD A POLICY MANUAL CONTAIN?
The manual should provide tightly worded
descriptions of corporate positions. The following is a sampling of sections
that should be included. Additional sections may be required due to the nature
of your business.
- Introductory comments from a senior officer (e.g., President) specifying
the purpose and organization of the manual.
- Code of Employer-Employee Relations - specifying the basic rights of both
the employee and the employer.
- Optional - organization charts, business function charts, a definition of
the corporate culture.
- Equal Employment Opportunity
- Sexual Harassment
- Employment Agreement
- Orientation and Training
- Medical Procedures
- Hours of Work
- Reporting of Time and adherance to defined methodologies.
- Temporary and Part-time Employees
- Termination of Employment
- Salary Administration
- Performance Appraisals
- Bonuses and Pension
- Severance Pay
Reimbursement of Employee Expenses
- Automobile Usage/Vehicle Care
- Customer Entertainment
- Meal Reimbursement
- Expense Account Guidelines
- Participation in Trade and Professional Associations
- Health Services
Company Premises and Work Areas:
- Maintenance of Work Area
- Personal Property
Absence from Work:
- Attendance and Punctuality
- Short-term Absences
- Leaves of Absence
- Behavior of Employee
- Personal Appearance of Employees
- Personal Finances of Employees
- Customer Relations
- Vendor Relations
- Personal Telephone Calls, Mail, and use of Internet (incl. E-Mail)
- Conflicts of Interest
- Confidential Nature of Company Affairs
- Intellectual Property
- Disciplinary Affairs
- Drugs and Narcotics
- Maintenance of Personnel Records
- Updates (Log)
It is not uncommon to structure the
policies in accordance with a numbering scheme somewhat similar to a financial
chart of accounts. Further, the Policy Manual should be prefaced with a Table of
Contents which reference the section numbers. An index is also helpful.
When writing policies, keep the language
simple, clear, and to the point. Your objective is to write policies in such a
way as they may not be misinterpreted or leave anything to someone's
imagination. After policies have been written, they should be carefully reviewed
by management and modified accordingly.
It is important to recognize that the
policy manual is a legal document and ultimately represents a contract with your
employees. As such, it should be reviewed by your corporate attorney.
Policy Manuals are normally printed and
bound and distributed to managers to review with employees. It is not unusual
for companies not to allow such manuals off of corporate premises. Further,
manuals are often numbered and assigned to individuals. The reasons for this are
twofold: to control the whereabouts of the manuals and to assure employees have
Regardless of how the manuals are
distributed, it is important to obtain a signed statement from each employee
that they have reviewed and understood the policies contained in the manual.
This statement should then be filed in the employee's employment jacket for
maintenance. In the event of modifications or additions to the policy manual,
updates should be issued and employees acknowledge they have read it as well.
Although companies will typically print
Policy Manuals, there is a movement underfoot whereby the Policy Manual is made
available to employees via a secure corporate intranet. In this instance, there
should be concern over unauthorized printing and distribution of the policies.
If you are going to the trouble of writing
a Policy Manual, make sure that it is effectively implemented and enforced.
There is little point in enacting legislation if you are not going to enforce
I have always found the necessity of a
Policy Manual to be interesting. There are those employees who can
conceptualize, take initiative, and lead moral and ethical lives. But there are
also those who need to be told what to do. It is for this latter group that
Policy Manuals were devised, not the former.
Today, the younger generation needs such
structure. They have grown up under a rigorous set of rules and regulations and
cannot image life without such formality. Let me give you an example, as a
child, I lived and breathed baseball. In addition to playing little league, we
would have pickup games before school, after school, and during recess. We
probably played more baseball on our own as opposed to under the rules of the
little league. But today's kids are not like this anymore. Having coached for
ten years I have observed that kids rarely, if ever, have pickup games. Instead,
they feel more comfortable operating under the rules of a league. I knew of a
large group of kids who wanted to play recreational slow-pitch softball during
the summer. The fields were available for such play, but this never happened. It
wasn't until I devised a local league with teams, uniforms, and rules that they
all signed up to play. This taught me how structured our younger people have to
be; they actually prefer being told what to do as opposed to exercising personal
initiative. I find this very odd and somewhat disturbing. Nonetheless, these are
the people who are now entering the workforce.
So, if you are a small company, should you
develop a Policy Manual? If you find your employees require structure in their
lives or if there is a possibility the company might be sued by an employee, the
answer, sadly, is Yes. I cannot imagine operating a company in today's litigious
world without one.
Copyright © 2006 MBA. All rights reserved.
About the Author
Tim Bryce is the Managing Director of
M. Bryce & Associates
(MBA) of Palm Harbor, Florida and has over 30 years of experience in the
management consulting field. He can be reached at email@example.com
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Article Published/Sorted/Amended on Scopulus 2010-01-05 10:17:10 in Employee Articles