Whether you are Smith & Son or an enterprise with 75 employees or more, it is important that everybody on the team is well-aligned on the same page. It’s awfully difficult to move forward with people pushing and pulling in different directions. One way to help ensure everyone shares and understands the company is the development of an Employee Handbook. An employee handbook is a compilation of all your company’s policies and procedures, as well as employees’ legal rights and obligations. Having an employee handbook makes it easy for you to communicate rules and responsibilities to employees, so there’s no question about what’s expected from them — or from you, as the small business owner. Also, certain elements within the handbook—such as perks, compensation, benefits, and a safe work environment—are essential for the retention of employees. There is no law saying you MUST have an employee handbook – although it may contain references to labour laws specific to your industry – but it can become a very useful tool as your company continues to grow. If you decide it is worth it to go ahead and put your handbook together, make sure it contains at least the following 10 elements:
- Company Mission & Vision
Define your company’s mission, vision, and purpose right off the top so your employees can have complete clarity about, and alignment with, your company’s values. Your values and beliefs are the guiding principles—that which matters most to you—that drive every aspect of your business. It’s your moral compass and core, and gives you and your employees a sense of purpose and direction. In this section you might want to include a welcome letter from the owner/founder, a bit of history of the company, the origin story, any significant statistics that might have an impact, etc
- Compensation, Benefits & Perks
This will be a large section and the first the employee will read in detail. They will want to have a full and clear understanding of when and how they will be compensated, along with the performance review process, and they also want to understand the benefits and company perks for which they are eligible.
In terms of compensation, you will want to define frequency of payment (bi-weekly, monthly, etc.) and how they get paid (cheque, direct deposit, Paypal). This is where you state your overtime policy, define work hours, and discuss your pay grade structure so that people know where they fit in the structure of the company., Within this section, you should also outline procedures for performance reviews and salary/bonuses. Do you give structured annual or semi-annual appraisals, or is the process more casual? Do employees receive a certain percentage bonus based on the success of the business, or do they receive individual performance-based or “spot” bonuses? There’s no right or wrong way to do it—simply be transparent about your processes.
When it comes to benefits, you want to deliver a general overview of what you offer in terms of health care, dental, vision, life insurance, and retirement plans, including the eligibility requirements. In this section, you want to explain:
- Basic health, insurance, and retirement benefits and eligibility.
- Education and training benefits.
- Perks. From paid-for company phones and laptops, to free lunches, to flexible schedules and remote work, outline the pluses that make working for your company special and unique. Perks are how you can attract and retain top talent.
- Code of Conduct/Employee Behaviour
Surely you have your own expectations for the professional manner in which employees will conduct themselves on the job. Because there are varying opinions on what “professional” means, you will need this section to make your expectations very clear. Hwre is where you will also reference policies geared to specific on-the-job conduct. Such policies may include:
- Dress code
- Smoking, drug and alcohol abuse guidelines
- Use of phones, email, and internet during working hours
- Social media policy
- Data and customer privacy
- Meal breaks and rest periods
- Rules around accepting gifts from clients
- Conflict resolution policy
- Paid Time Off Policies (Types of Leave)
Here you should spell out your company’s vacation policy, such as how vacation time is earned, and how to schedule time off. It should also spell out which holidays the company observes, including which holidays the company closes for and, if the company is a restaurant or other business that stays open on holidays, how employees will be compensated for working the holiday. You should also research and address local, provincial and federal laws as they apply to sick leave, family medical leave, and other types of leave.
- Anti-Descrimination and Anti-Harassment Laws
It’s important to understand and list all of the current federal, provincial, and local laws that are pertinent to your workforce including equal employment opportunity, anti-harassment, and anti-discrimination laws.
- Disciplinary Policies
Your employees must understand the risks of not following the policies, laws, and procedures that you lay out in the employee handbook.Use this section to explain that they will be held accountable for their actions and behavior. You want employees to see that they’re receiving fair treatment and that all employees are subject to the same disciplinary process.
- Safety & Security
To avoid any confusion and potential litigation, and to protect your employees, clearly define the measures in place to ensure a safe physical and nonphysical work environment. Whether it’s policies and procedures to operate machinery, or your process for filing sexual harassment or bullying complaints, your employees – your most valued assets – should feel comfortable and safe in their working environment.
- Confidentiality/NDA/Conflict of Interest
Companies that work in competitive industries with valuable trade secrets and concern about employees jumping ship for a competitor may want to have employees sign a non-disclosure agreement or at least include a conflict of interest policy in the employee handbook.
It’s important that your employees understand that your employee handbook is not a contractual agreement between you and them — which would mean they could sue you if the policies and procedures within the handbook aren’t upheld. Thus, be sure to include a disclaimer that states the employee handbook is not a contract, to protect yourself against such possibilities. Also, you must communicate that policies are subject to change. You have the right to change policies as your business shifts and evolves; however, you also have to disclose any pertinent updates that would affect your employees.
- Employee Acknowledgement
This is where your employees acknowledge that they have read, understood, and agreed to abide by the policies and provisions laid down in the handbook; they do this with their signature. Make sure the page is detachable so that it can be filed after signing and be safely stored.
Once you have created your Employee Handbook, and after it has been put to good use for a while, make sure to review it. Talk and listen to your employees, peers, HR staff, and lawyers – should you have them – throughout the year. Our world and your company are continuously changing and evolving so it’s important to make sure your handbook keeps pace. Consider reviewing it at least once a year and making material updates when needed.