An employee handbook will spare you a lot of trouble. But first, you should go to the trouble to write it.
A good employee handbook isn’t necessarily a lengthy, boring document filled with cliches and formal language. It should be a go-to source for employees whenever they have questions about their rights and responsibilities — and it’s in your best interest to make the information inside as accessible as possible.
In this guide, we’re covering everything you need to know about employee handbooks, their must-have components and the best practices for building ones. When you finish reading the guide, you’ll find a customizable employee handbook template.
What’s an employee handbook?
An employee handbook, a.k.a. staff handbook or company policy manual, is an internal document that introduces employees to the company’s values, rules and key procedures.
It’s a responsibility of an HR team to develop an employee handbook, but an employer or the management team should also participate in the process.
As a handbook includes documents and statements that define the company’s direction, it must always be reviewed and approved by the top-level management.
New hires usually familiarize themselves with an employee handbook during their first days at work. Employees also turn to it when they need to refresh their memory about certain topics, such as sick leaves, health insurance, compensations, etc.
Is an employee handbook legally binding?
There are very controversial opinions on this topic.
It’s generally considered that an employee handbook is not a binding contract between an employer and an employee.
However, the key factor determining whether a handbook is indeed a legal document or not is the language used in it. Unless you clearly indicate otherwise in the text of the handbook, the document may be considered legally binding.
In this case, the employer should require employees to sign an employee handbook acknowledgment form to confirm they’ve gone over the handbook carefully.
8 Reasons every company needs an employee handbook
An employee handbook is an integral part of your business documentation. When well-maintained and easily accessible, it:
Speeds up onboarding
The document is particularly important for onboarding new employees.
Explaining your company’s values and policies to every new hire would become a serious burden without an employee handbook in place, especially for a fast-growing startup.
A handbook communicates critical information to new hires and saves time for everyone involved in the onboarding process.
Aligns everyone on the company culture
By including your company’s mission, vision and value statements in an employee handbook, you make your first steps toward building strong company culture. After reading the handbook, employees will understand the principles they should live up to and have a better idea of what lies behind your company strategy.
Communicates rights & responsibilities
How are people supposed to know what you expect from them if you don’t explain it? An employee handbook is your chance to compile all the information about your employees’ rights and responsibilities and communicate it with well-structured, digestible content.
There’s a lower risk of serious conflicts in the workplace when you have a code of conduct included in the employee handbook.
A code of conduct is a policy that outlines expected employee behaviors towards their coworkers, managers and the overall organization. It’s a guidance tool that employees must turn to whenever they need to make ethical decisions.
The ethical principles covered in a code of conduct (and therefore, in an employee handbook) aim to create an unbiased and unprejudiced work environment for everyone.
Fosters management-employee relationships
An employee handbook creates transparency between management and employees.
By offering a framework to guide management and leadership, a handbook ensures that each department manager follows clearly defined, uniform standards in their relationships with subordinates.
Employees, in their turn, are also aware of what kind of behaviors they should expect from their management and can speak up if certain policies aren’t enforced appropriately.
Addresses cultural differences
If you hire employees from all over the world, you need to acknowledge cultural differences in your employee handbook. You can include policies that recognize cultural holidays, support diversity and create an inclusive workplace for everyone.
Your handbook will remind the management and employees that they work with people from different cultures and help them treat each other with respect.
Alongside company policies, an employee handbook also includes procedures — actionable instructions that explain how to follow policies. With policies and procedures in place, employees can always turn to a handbook for guidance on established company processes, without disturbing their colleagues.
Mitigates risks of lawsuit
In a way, a company policy handbook is your protection from potential legal disputes.
Say, you had to fire an employee for repeated violation of your attendance policy. You can prove your decision fair only by presenting the policy in writing.
Also, it protects your employees from unknowingly breaking your company policies, which may often lead to lawsuits against the business.
What should you include in your employee handbook?
Your employee handbook should always include the following sections:
- Onboarding process.
- Company information.
- Company policies.
- Key company procedures.
Let’s go into more detail.
Every employee handbook starts with a sweet and short introduction that should encourage people to read on. It covers the reasons for creating the handbook and the key points made further in the text. The introduction should also indicate whether the document is a legally binding contract or not.
It’s common that an employee handbook starts with a letter from a Founder or CEO. In their message, a C-level executive talks about the purpose of the document and how it supports the company’s core values. Since the document targets new hires in the first place, a few words of appreciation for new team members will be suitable.
No matter what you include in your introduction, the text shouldn’t be longer than one page — otherwise, you risk losing readers’ attention before they get to the really important parts.
This is one of the first documents your new hires will read. Use the handbook to set the right expectations for new employees from their first days and months at work.
The abstract from Valve’s employee handbook perfectly illustrates how you can guide new hires through the onboarding process and address possible questions.
This is where you explain your company culture and how your employees will fit in it. To introduce new hires and current employees to your organization’s principles and the context behind them, this section should cover:
- Company history. Explain how the business started and how it has evolved into what your employees are witnessing right now. Show how the company culture has appeared and developed throughout the company's history.
- Company mission. Next, you need to define the purpose that drives the company’s daily operations. A mission statement is bigger and more abstract than financial goals. For instance, the mission of Starbucks is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”
- Company vision. A vision statement aligns with the mission and expresses the reason the company exists. It explains how the company wants to affect the community, or the world, through its products or services. Starbucks expresses its vision as: “treat people like family, and they will be loyal and give their all.”
- Company principles. Lastly, you need to cover the principles that guide decision-making and drive the company closer to realizing the company mission and vision. The principles are usually very generic concepts, like delivering high-quality products, creating highly efficient processes or providing an excellent customer experience. One of the principles supporting the Starbucks culture is: “Every person who visits a Starbucks store is a customer, whether they make a purchase or not.”
If you already have company information documented — good for you! If you don’t, here’s where you need to turn to the management once again.
If there are no policies, they should be developed. Similar to the company values and other documents that define the direction of the company, policies should be created in collaboration with the employer or top-level management.
The most common examples of company policies used in employee manuals are:
- Code of conduct. The policy must provide standards for workplace behaviors for both employees and managers. It typically includes attendance policy, dress code, conflict of interest policy, communication rules, intellectual property policies, disciplinary action and other policies that define employee responsibilities and actions that follow policy violation.
- Equal opportunity and non-discrimination policies. You should firmly express your commitment to preventing discrimination, harassment and violence in the workplace.
- Compensation and benefits policies. Beyond communicating employee responsibilities, you should also explain how you pay and reward employees for their contribution to the success of your company. In this section, you may also highlight the benefits and perks employees access when joining your organization.
- Resignation and termination policy. You should make it clear how work contracts are terminated and what is the process following the resignation or termination of a contract.
It’s for an employer to decide what policies should be included in a handbook, but it’s important to check with local laws for a list of mandatory HR policies.
For instance, US-based companies need to comply with the Family and Medical Leave Act (FMLA), COBRA, Equal Employment Opportunity Commission (EEOC) anti-discrimination laws, the Americans with Disabilities Act (ADA) and the Fair Labor Standards Act (FLSA).
Scribe top tip: Consider rewriting your formal company policies specifically for an employee handbook. Make your policies sound more friendly and human-like. See how Valve is absolutely killing it.
Key company procedures
Often, standard operating procedures and training manuals go hand in hand with certain policies.
For example, an attendance policy isn’t complete without procedures explaining how to request time off, notify a supervisor about lateness, track time when working remotely, etc.
Procedures should offer a standard way of performing repetitive tasks that don’t require creativity or innovation. These are simple step-by-step instructions ensuring consistent processes and predictable outcomes.
While the following procedure example is just a joke from Valve’s employee handbook, you can use it to inspire your own procedures.
If your procedures are more complicated than the one above, use Scribe to generate step-by-step instructions automatically.
The tool will record any digital process and turn it into a structured guide, complete with visuals and instructions.
This is an optional element, but having it in your employee handbook may save you a lot of trouble. Disclaimers cover topics related to employment-at-will and the validity of the policies featured in the handbook. They’re placed on the last page of the document and may contain statements like:
- “The employer reserves the right to modify this handbook, amend or terminate any policies and procedures whether or not described in this handbook at any time.”
- "Nothing in this handbook implies a contract of employment.”
- “The policies featured in this manual are to be given priority in case of a conflict with rules and regulations found elsewhere in the company documents.”
5 Tips to create a good employee handbook
Here are a few tips on how to write a company policy manual that won't put your employees to sleep:
Cut the amount of content
A good employee handbook runs between 40 and 60 pages, with most of the space filled with visuals and large font.
Avoid including each and every policy you can find on the web in your employee handbook. Focus on content that adds value to your new hires and current employees and omit rules that have nothing to do with your company culture.
Exclude legal verbiage
Your company policy manual isn't the place to show off your big words — keep the language simple and straightforward so that everyone can understand it. Remember that you want your employees to actually read (and retain) the information in the manual, so using language that they'll understand is key.
Cut your policies if they’re too long and try to summarize the key points of each policy in your handbook.
Make it skimmable
The purpose of your staff handbook is to communicate the most critical information about your company culture and internal policies. And it’s in your best interest to make this information easy to read and process. These simple tips will help you with it:
- Don’t forget about the table of contents.
- Number the pages.
- Include the section name at the top or bottom of each page.
- Use H2s, H3s and H4s to split texts into digestible chunks.
- Use big, easy-to-read fonts.
- Leave a lot of empty space between paragraphs.
It’s no surprise that all companies follow similar templates when writing company policies, and there’s nothing wrong with it. However, it’s important that your employee handbook reflects your company’s style, values and tone of voice.
Shake things up a bit. Think of a fun and innovative way to present your handbook (as Valve did). Instead of making it sound too serious, use storytelling or add jokes here and there. Turn to your design team to develop custom visuals for your handbook.
Make it easily accessible
Publish a copy on the company intranet, pin it in your Slack workspace or/and link to it from your internal wiki. Employees should be able to access the handbook whenever they need it.
It’s also a good idea to print a couple of copies and keep them on the bookshelf in the office.
Employee handbook template
Writing a company policy handbook from scratch can seem daunting, but luckily, there are plenty of templates out there that you can turn to for inspiration. Our employee handbook template below provides you with a simple structure to get started with.
How to use the template: The template is built in Scribe Pages, a documentation tool by Scribe that allows you to create process documents filled with images, videos, texts and Scribes (a.k.a. auto-generated step-by-step guides by Scribe).
In the template, you won’t find a separate section for procedures — that’s because you should insert relevant procedures as they come up in the content.
We used Scribes to illustrate how you can create and add procedures to your employee handbook. Here's how to duplicate and use a Scribe Page Template.
Employee handbooks may not be the most exciting reading material but they don't have to be dry, outdated and unreadable either. By following the tips above, you can create an employee policy handbook that is both informative and accessible — without putting your employees to sleep in the process.
To make sure you don’t fall asleep in the process either, use automation tools and templates that speed up documentation. Scribe is your go-to solution for auto-generating step-by-step guides and instructions.
Try Scribe today.