The Nowsta Blog

Management tips and labor market insights to help you run your business

The Employee Handbook: Why You Need One and What to Include

By Stephanie Knapp on November 30, 2018

Writing an employee handbook as a manager is a lot like eating vegetables as a kid. It’s good for you in the long run, but there are lots of other things you’d rather do. Your to-do list is probably a mile long and unforeseen challenges pop up every day. Time is at a premium, so it’s easy for something like an employee handbook to fall by the wayside.

But this is an investment in the future that’s worth making time for. The employee handbook is your chance to start every new hire off with a baseline understanding of your company’s culture, expectations, and operations. Below, we’re going to tell you how an employee handbook can help your business, show you what to include in yours, and provide a few examples you can look to as you write your own.  

4 reasons you need an employee handbook

1. It sets clear expectations for staff

Excelling in the workplace is difficult enough for employees as is, but without a clear understanding of what the business expects of them, it’s nearly impossible. It would be like if you were a student, and your teacher assigned you a big project without providing directions or a grading rubric -- there’s practically no way you’d be able to get an A. You’re putting your employees in the same situation if you don’t lay out your business’ expectations for them.

Unfortunately, that appears to be the norm in many workplaces. Gallup polling has found that only about half of employees know what their company expects of them, making it difficult for them to reach peak performance. The problem is compounded for high-turnover, hourly positions in retail, food services, and the like, as expectations can vary for these roles between companies, even within the same industry. The employee handbook solves these problems by serving as the single source of truth for employees to learn what the business expects of them, both in terms of work performance and personal conduct.  

2. It gives employees standards for behavior

Employee behavior goes beyond customer service. The way staff conduct themselves in the workplace affects the performance, morale, and even safety of their coworkers. At its worst, bad behavior can hurt your retention by driving out productive employees. Plus, there are legal ramifications when it comes to behavior around safety, discrimination, and harassment in all its forms.

Your employee handbook can help prevent bad behavior before it happens by laying out your standards for personal conduct, along with punishments for different offenses. In addition to informing them of the rules, it shows your employees that you’re looking out for them.

3. It speeds up the onboarding process

The faster a new employee gets up to speed with company policy and procedure, the faster they’ll become a productive member of the team. Your employee handbook is the perfect way to deliver this information to them, which lets you streamline the onboarding process and ensure everyone gets the same essential information.

4. It helps establish your company culture

Company culture is more abstract than dress codes or 401k options, but it’s critical to the success of your business. Culture influences everything from employees’ interpersonal behavior to their performance, and the handbook is the perfect place to introduce it to new hires.

If you need a more concrete example of why culture matters, consider this: No matter how thorough your training is, employees will find themselves in scenarios that they haven’t seen before or been advised on. How will they behave in those cases? What decisions will they make? The answer is largely determined by culture -- the employee is probably going to act based on the values the rest of the company cares about. For instance, if your company encourages a “customer first” attitude above all else, an employee may decide to provide a refund in response to a complaint they’ve never seen before. Culture empowers staff to act with confidence in these situations, knowing they’re likely making the right decision.

What to include in your employee handbook

Employee handbooks come in all shapes and sizes. The exact content you include in yours will likely vary based on your industry, size, and local labor laws.

But there are a few key sections almost any business will want to include. You can think about these in terms of the employee lifecycle. Start with the things a brand new employee would need to know for their first day, such as where the schedule is or how they’ll get paid. Then, think about their first month or two -- eventually, they’ll want to to know about how to take a vacation or call in sick. As time goes on, an employee may break a rule or start performing poorly. What happens in that scenario? All of these questions apply to any business, so you need to address them. With that in mind, here are the sections every company should include in their employee handbook.

Welcome and introduction

Start the employer-employee relationship on a positive note with a warm welcome. Thank employees for joining your team and explain your company’s values and mission. Sign the letter on behalf of the employee’s direct manager, the CEO, or even the entire company to create a sense of community.

HR policies

In this section, you should educate employees on your company’s HR policies, such as:

  • Attendance

  • Holiday leave

  • Vacation and sick days

  • Non-discrimination

  • Alcohol and drug use

Nearly every business should have policies on these topics, but you may want to write more depending on your business.

Pay and benefits

New employees are likely looking forward to their first payday, so you need to let them know what to expect. Examples of what to cover in this section include:

  • Payroll process

  • Available benefits

  • Workers’ compensation

  • Performance reviews and raises

  • Employee discounts

Every business is different, and this is just a sample of what you can cover here. You should address anything that has to do with pay, wages, and benefits at your company.

Workplace procedures

Your employee handbook isn’t a replacement for training -- you’ll likely need to put together teaching documents and curriculum for each position. But your handbook should cover the more general procedures that apply to every employee, regardless of role. This can include:

  • Where to park

  • How to access the building

  • Where to find and store equipment

  • How scheduling works

  • Your breaks policy

More than any other section, your workplace procedures will differ depending on what type of business you are.

Code of conduct

What should employees do and not do when they’re representing your company? That’s the question you’re trying to answer in your code of conduct section. Your policies here should reinforce the values laid out in the welcome section. You may want to include guidelines on:

  • Appropriate language

  • Dress code

  • Hygiene

  • Phone usage

  • Social media and internet usage, both in terms of using these platforms at work and how employees affect the company’s reputation through their online bahavior

Tell employees what the rules are for each of these areas and outline clear punishments for different transgressions.

Resignation and termination

Employee turnover is a fact of business, so you need protocols in place for when an employee resigns or is fired. Your handbook should tell employees what happens when they leave the company, including points like:

  • How to get their last paycheck

  • How to clear out their locker or workspace

  • What materials they need to return

In the case of resignation, be sure to include a request for two weeks’ notice, and make it clear that a deliberate violation of that request endangers their chances of receiving a positive reference. In the case of termination, tell employees about the steps that precede a firing, such as formal warnings and disciplinary meetings. Having a clear policy increases the chances that separations happen amicably.

5 employee handbook examples you can learn (or steal) from

Writing an employee handbook can feel like a daunting task. But you don’t have to reinvent the wheel. Below, we have five examples of great employee handbooks across different industries that you can look to for inspiration.

Wendy’s

Wendy’s has more than 11,000 hourly employees, so the company has plenty of experience refining the employee education process. Their handbook is incredibly thorough, covering just about any scenario an hourly food service employee could encounter.

Dollar General

Discount retailer Dollar General is a national retail chain with thousands of hourly employees. Their employee handbook is comprehensive and even features an alphabetical table of contents for easy navigation. Not to mention, the document kicks off with a letter from the CEO and CPO (Chief People Officer) that starts each new hire on a positive note.

Hansen’s Dairy

Smaller, local companies need handbooks too. Hansen’s Dairy provides a great example. Hansen’s is a dairy farm in Hudson, Iowa that operates two shops serving ice cream and other dairy products in the nearby cities of Waterloo and Cedar Falls. The employee handbook for those two shops is a great example for other small businesses in food services or retail to look at, as it concisely covers all the information employees need. That makes it a great source of inspiration for managers writing their first handbook.

465 Staffing

Staffing companies are in an interesting situation, as they need to account for employees’ behavior in interactions both with the agencies’ clients (the businesses using the agency), and those clients’ clients (the patrons of the businesses using the agency). 465 Staffing, a healthcare-focused staffing agency in Indianapolis, handles this complexity well in its employee handbook. They’ve outlined policies for almost anything you can think of, including use of workplace computers for personal business, social media behavior, cell phones, and more.

Ghilotti Construction Company

Understandably, employees always want to know about their benefits. Ghilotti Construction Company offers several and covers them extremely thoroughly in its employee handbook. Its section on workers’ compensation is especially informative, which is crucial in the construction industry.

Live by the book

Your employee handbook can be an incredibly valuable resource both for you and your employees. But for that to happen, it can’t be a document employees read once and forget about. Once you’ve written it, you need to enforce the rules within it consistently and fairly to get the full value.

Stephanie is a marketing copywriter who loves the variety and creativity that comes from collaborating with technology companies. Her background in market research also means she's forever on the hunt for the perfect stat to support a blog.

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