Shawn Smith

Article Summary:

You can develop an effective employee handbook by following these guidelines.

How to Develop an Employee Handbook

An employee handbook can be an invaluable tool for an employer, serving to inform employees about company policies, procedures and practices and to communicate expected standards of performance and conduct. A well-designed handbook can positively influence employee morale and promote employee loyalty. It can introduce a new employee to the organization, helping the individual to fit in more easily. In addition, the handbook can create a sense of consistency of practice that will enhance the employee's feelings of being treated fairly-- there are few factors more destructive to the employment relationship than an employee's belief that employment decisions are arbitrary. The handbook can also serve as a reference guide to help managers and supervisors take appropriate actions in a given situation. Without the handbook, supervisory employees are left to their own devices-- which can lead to uninformed, inconsistent and possibly illegal decision-making.

The well-drafted employee handbook can be an important tool to avoid liability in employee lawsuits. The employer that clearly states policies against harassment and discrimination, outlines grounds and procedures for termination and follows these guidelines over time will be in the best position to defend against charges in these areas. While state and federal laws sometimes require that certain policies and procedures be posted on employee bulletin boards or other public places, distributing a handbook to all employees ensures that the company's critical standards are accessible to all, and that each employee will have a handy reference when questions arise.

There is no single way to write a handbook, nor are there set rules as to what polices and procedures should/should not be included in the manual. Some organizations choose a formal writing style; others a more friendly, conversational tone. Many of these decisions are up to the employer, and depend on the unique culture of the organization.

Discussed below are some of the factors that should be considered in designing your organization's employee handbook, as well as an outline for determining what policies, procedures and other elements you should include.

Writing Style
A diverse population of individuals will be reading this document. Keep in mind that you will want everyone to understand your message. The handbook should be written in a clear, simple, easy to read style. Avoid ambiguity; draft the policies carefully in order that they will be interpreted the way you mean them to be. Do not use excessively small print, and leave plenty of white space on each page. Avoid words like "will," "must," "employee rights" and other words or phrases that commit an employer to act in a certain way in all instances. Instead, use words such as "may," "can" and "generally."

The tone of the handbook should be positive throughout. Address the message to the majority of employees that desire to understand and abide by the organization's standards and procedures; do not adopt a "punitive" tone. If possible, explain the reasoning behind certain policies, especially those that are likely to be seen as controversial.

Contents of the Employee Handbook
In general, the Employee Handbook should contain:

  • Answers to the questions most frequently asked by employees
  • Information pertaining to basic employment matters about which all employees should be aware

The best employee handbooks are organized logically, with the policies grouped into sections. The pages should be numbered, and there should be a good table of contents that enables employees to find specific topics easily

Other Considerations

Legal Issues.
Many employers resist the notion of adding legal disclaimers to the employee handbook. Understandably, most organizations want an employee-friendly document-- not a legal instrument that could alienate and frighten its employees. However, it is important to include appropriate disclaimers to ensure that the handbook is not interpreted as an employment contract. Disclaimers should appear prominently within the handbook-- in large and/or bold type, and several times if the handbook is particularly lengthy. Examples of possible disclaimer language are as follows:

"This handbook is not intended to create an employment contract, express or implied, and in no way serves to modify the "at will" employment relationship between the employee and employer. Either party may choose to terminate the employment relationship at any time, with or without cause or notice."

"This handbook is intended as a guide only, and is not intended to be a complete description of employer's policies and procedures."

"This list is intended as an example only, and is not intended to include all acts that could lead to employee disciplinary action." [When discussing progressive disciplinary policy]

"This handbook supercedes all previous information concerning the subjects discussed herein, whether oral or written. The employer reserves the right to modify the policies and procedures contained herein at any time."

"This handbook can only be changed in writing, by [the head of the organization].

Although you can save a considerable amount of money by drafting the handbook yourself, it is advisable to submit a draft to an attorney for review and fine-tuning prior to releasing it to employees. In this way, you can ensure that the policies comply with all applicable laws, and that your disclaimers are adequate to protect you when the need arises.

What not to include in the Handbook. The handbook is intended to outline the organization's significant policies and procedures, not to cover every situation that may arise in the course of the employment relationship. The manual should focus on those issues that are most relevant to the individual employer, not situations that seldom, if ever arise, or issues that apply to only a small group of employees. Also, avoid including information that is subject to frequent change, as this will quickly render a new handbook out-of-date.

In addition, the handbook should not duplicate details that are covered in other employee publications. For example, while the handbook may include a brief statement of employer benefits, and an outline of eligibility for coverage, there is no need to address at length the information that is provided in the organization's benefits information package. In these instances, the handbook should direct employees as to where to obtain further information.

As employees will be likely to take the handbook home and show it to friends and family members, you should be careful not to include confidential information, or other details that you would not want outsiders to know.

Establish a procedure for regular review. It is critical to review the handbook periodically to ensure that it accurately reflects changing policies and practices of the organization, as well as changes in federal, state or local laws. Establish a review procedure at the outset, at the time you develop your handbook. The procedure should include:

(i) a time frame for review (preferably annually)

(ii) designation of the individual(s) responsible for conducting the review

and (iii) a method for notifying employees of any changes to the handbook.

Notification can be accomplished either by issuing a revised version of the handbook, or a periodic "supplement" to the existing manual. Have employees sign an acknowledgment form upon the receipt of these revisions.

Introducing the Handbook to Employees
If your organization does not currently have an employee handbook, you will want to take care to properly introduce the new handbook to employees. Initially, employees may feel overwhelmed when a volume of "rules" is handed to them. You can help to allay this concern by explaining that the handbook does not constitute a change in policies, but merely serves to put into writing the policies, practices and standards that the organization has always had. If the handbook includes any elements that do comprise a change from past practices, you may want to include a summary sheet outlining any significant changes.

In addition, the employer should distribute along with the handbook an employee acknowledgement form, which each employee should sign and return for inclusion in the individual's personnel file. The form should include an acknowledgement by the employee that he or she has received and read the handbook, and agrees to abide by all of the policies contained in this document and to seek clarification from supervisors when needed. The form of acknowledgement should also restate the disclaimers discussed above. In this way, in the event of any legal disputes surrounding the policies contained in the handbook, you will have proof that the handbook was distributed, and that the individual acknowledged his or her understanding of employer standards and practices.

Avoid the "Cookie Cutter" Approach
The task of preparing an employee handbook can seem daunting to smaller organizations, or employers without large Human Resources staffs. Whatever you do, avoid the temptation to merely copy another organization's handbook. Laws vary widely from state to state, and practices differ depending upon the industry or labor market. What may be applicable to one employer may not be relevant to you. In addition, if you do not take the time to develop your own handbook, you will miss out on the opportunity to convey to employees the elements that make your organization special.

Keep in mind that the basis for most of the material in the handbook already exists in your organization. Even if you have never before had an employee manual, you are already operating under a system of informal or unwritten policies and procedures. You may even have already documented some of them in internal office memoranda. Once you realize that the employee handbook is merely a formalization of standards and practices that already exist, the task of creating this document will seem much more manageable.

Shawn Smith is a consultant, speaker, attorney and the founder of Next Level Consulting, LLC, an organizational development and management consulting firm. She has worked with a broad range of public, private and non-profit organizations to develop practical programs and strategies to navigate change, increase individual and organizational effectiveness and exceed business objectives. Shawn is the co-author of The HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals (AMACOM 2004). Contact her for more information through her web site at

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