Employee Management

If you’re like many entrepreneurs, you’re too busy running your company to think about how to run it. So you create a vacation policy when an employee asks for time off and a dress code when someone arrives at the office wearing an inappropriate T-shirt. Sound familiar? If so, it’s time to put your HR policies in writing.

For one thing, codifying policies in a handbook gives you a measure of legal protection in the event that an employee sues you for wrongful termination, harassment, or illegal discrimination. “A handbook isn’t lawsuit-proof,” says Elaine Tweedy, director of the University of Scranton Small Business Development Center in Pennsylvania. “But what the court system looks at first is your policy. And if it’s not in writing, then you can’t prove you have one.” Of course, it’s better if employees don’t sue at all, and formal policies can help there, too, by generally encouraging fairness and consistency.

Plus, if you formulate your employment policies with a progressive, employee-friendly cast, they can be powerful tools for recruiting and maintaining morale. “The primary benefit of putting together a handbook is that the owner can design a work experience that he wants for himself and the people who work for him,” says Rick Galbreath, president of Performance Growth Partners in Bloomington, Illinois.

The pages that follow will get you started. And once you put the policy down on paper, follow it. “If you don’t,” says Tweedy, “your employee has every right to sue you.”