June 28, 2022
by Mara Calvello / June 28, 2022
What’s one thing that both the smallest of startups and the largest of enterprises need?
An employee handbook. If you think having one is unnecessary for your small company with just a handful of employees, think again. Regardless of your organization’s size, a well-written handbook’s impact shouldn’t be overlooked.
An employee handbook, sometimes called an employee manual, is a document that communicates a company’s policies, mission, and expectations. An employer will give this document to employees to explain their legal rights and their responsibilities while employed with the organization.
Passing out a handbook can make new hires feel more equipped to handle their daily work while increasing their efficiency during onboarding. In addition to having critical details for new employees, a handbook can include longer documents that provide a reference for company policies throughout an employee’s tenure with an organization.
It’s common for human resource professionals to turn to HR compliance software as they manage all HR-related resources and details in a handbook.
Taking the time and putting in the effort to create an employee handbook is a must for organizations of all shapes and sizes.
Let’s look at some of the main reasons why your team needs an employee handbook to reference.
If you’re creating a company employee handbook for the first time or for a brand new company, you need a place to start. And for that, it’s all about knowing what sections to include and what information goes where.
“An employee handbook is a policy-driven document, making it clear to employees what’s expected, including areas around conduct and performance. A well-written handbook can be a great way to reinforce culture, values, mission, and vision.”
Kristina Creed
Director of People Operations at G2
Your company’s handbook should start with the basics. Kick things off with an employee handbook table of contents at the beginning and then introduce information and key details. This section should be mostly informative and helps lay the groundwork for basic employee information. Employees will use this section when they have general or high-level questions.
First, provide information about the company’s mission statement and values to ensure alignment right at the start. Share a statement explaining what matters most to the company and highlight the values employees should abide by.
Need some inspiration? The G2 Employee Handbook outlines our PEAK values, which you can read more about on our G2 Culture Page.
This section should also include an equal opportunity employment statement. This is a necessary part of the handbook, not only for legal purposes but because it promotes a culture of meritocracy and respect in your workplace.
Next, outline the recruitment and selection process. This section should share the typical steps of the hiring process and information about background checks, referral programs, and other general guidelines. Also, mention if any of these rules differ between full-time and part-time employees, in addition to temporary, contract, and non-exempt staff. Define what it means to be full-time and part-time employees.
Finally, share some background information on the company and how it came to be. Have some fun with this section!
The company background information can answer questions like:
Once the basics are covered, move along to specifics surrounding workplace policies and the conditions employees can expect to work in.
The policies and tips that should be included here are:
A code of conduct spells out how an employer expects employees to conduct themselves at work. Every organization has boundaries, and this code essentially covers any unacceptable behavior.
Rules and regulations within a code of conduct can include:
An employee handbook's compensation and development portion provides information surrounding employee compensation and employee development. This section is one of the most frequently referenced sections in the handbook.
First, detail the payroll schedule, meaning how often full-time and part-time employees receive their paychecks. Options here are usually a weekly, biweekly, semimonthly, or monthly payment schedule. This section also goes into detail about any payroll tax deductions.
There are 3 main types of payroll deductions:
Next, outline if overtime pay is offered to employees who work over their agreed-upon hourly work week. This section should also provide information regarding promotions, lateral career moves, and transfers. Additionally, this part should be specific about other forms of compensation, like employee bonuses and merit pay.
Then, have a performance management section of the handbook. Employees use this information to understand performance evaluation. Managers look to this information to clarify which duties are expected of them. You can mention the objectives of performance reviews and how you expect managers to lead their teams. This should also include details about performance improvement plans (PIPs) and procedures for failure to meet performance goals should be provided.
Finally, detail your training and development plan for all employees and how your company is committed to helping them improve professionally and personally. Explain everything from training opportunities to tuition reimbursement.
Another frequently bookmarked area of an employee handbook is the section giving information about all the fun perks and benefits your company offers. After reading this section, an employee should feel well taken care of, appreciated, and entirely in the know.
Start the benefits and perks section by outlining details like eligibility, benefits start date, and your plan’s policy number. Then, get into the essentials.
First things first: the paid time off (PTO) policy. This is the policy your company offers its employees that allows them to take time off from work as needed for specific reasons or occurrences. How much you offer, or when you allow employees to use their PTO, can vary.
Potential types of PTO:
In addition to PTO, there are several other benefits and perks this portion of the handbook should outline and give details to. Some are:
It’s not likely an employee will stay at your organization for their entire working career, so the employee handbook should include details about offboarding. This should include:
This section should highlight when an employee will be given their final paycheck, how the exit interview process works, and how Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits work if someone is laid off or fired.
Last but not least, an employee handbook needs to touch on employment laws and various legal mandates.
Numerous federal and state laws affect employees. Some of these are:
The laws and regulations vary by state, but your handbook must mention the ones that apply to your organization.
Now that you understand what needs to be included in a basic employee handbook, let’s go into how to get started writing one.
First, review your current company policies and make any revisions that seem necessary. The last thing you want to do is spend the time and energy putting these policies into the handbook only to realize a few months later it needs to be updated. If any policy or rule requires some revising, now is the time!
Then, create an outline for the look of your handbook. This helps determine how you present the information to employees. Once this is complete, write basic introductions to each handbook section that is easy to understand and free of complicated jargon.
Once you assemble all the necessary and up-to-date information, send a finalized version to your company’s legal team to review. Asking for legal counsel ensures that it doesn’t contain statements that may have false information. Once the handbook has legal approval, consider where and how you’d like to publish the handbook. Remember that it should be easily accessible to all employees.
The work isn’t done when the handbook has been distributed to all employees. It should be updated when necessary. Consider reviewing policies at least twice a year to ensure the handbook always has the most relevant information.
When creating a handbook for the first time, it can be hard to envision the final results, even if you understand exactly what needs to be included. To make this easier, it’s best to lean on examples of what some well-known companies have done with their handbooks to spark some creativity.
While some companies gate-keep their handbook, HubSpot lets everyone read it by uploading their culture code onto their network. By sharing it, they practice the same transparency they ask from their employees.
Like HubSpot, Netflix also shares its Freedom and Responsibility culture handbook online. You’ve probably heard about, or read about, their culture before, as it seamlessly defines their culture and values by making them actionable, too.
Project management software Trello uses its platform to outline and display its employee handbook, which they call an employee manual. Each column on the board represents a different handbook section, starting with On Your First Day and continuing with benefits, working remotely, travel, vacation, and miscellaneous information.
Facebook makes its handbook available to anyone interested. Titled Keep Building Better: The Facebook Code of Conduct, their manual features a message from founder Mark Zuckerberg, along with sections about mutual support, protecting and empowering people, competing and collaborating, and engaging with the world.
Another interesting example of a well-done employee handbook is the one Basecamp has created. It utilizes a unique tone of voice, making sure the company’s personality stands out from other employers. Some notable sections are What We Stand For, Where We Work, Our Rituals, and Vocabulary.
As the workplace continues to evolve, it’s likely up to the role of a human resource professional to ensure the handbook stays up to date with the latest information.
It’s important to remember that your employee handbook is not a legally binding document and does not ensure compliance. However, it can help protect your company from certain liabilities and communicate clearly with all of your employees by being the one cohesive location for important company details.
A comprehensive handbook is one thing. Now it’s time to look at your company’s culture to build a modern workplace for everyone.
This article was originally published in 2019. It has been updated with new information.
Mara Calvello is a Content Marketing Manager at G2. She received her Bachelor of Arts degree from Elmhurst College (now Elmhurst University). Mara works on our G2 Tea newsletter, while also writing content to support categories on artificial intelligence, natural language understanding (NLU), AI code generation, synthetic data, and more. In her spare time, she's out exploring with her rescue dog Zeke or enjoying a good book.
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