Employee Handbooks: A Powerful Communications Tool

by Richard P. Dacri

Most employers today have developed employee handbooks or policy manuals. As smaller employers see the number of their employees increase, they often begin to consider whether they should write one. Before doing so, they should ask themselves whether there is a need and if they believe there is, they need to determine the goal in having one.

Handbooks can be a valuable employee communications tool and a must for insuring a positive employee relations program at their organization. Unfortunately, handbooks also pose certain risks to employers. Some courts have held that handbooks can constitute a contract between the organization and their employees--a relationship many employers would prefer to avoid. At the same time, employee handbooks have proven to be an effective ingredient in keeping employers out of court. So should employers write one? Do the benefits of a handbook out-weigh the potential risks, and are the risks really that significant?

Employee handbooks are an effective communication vehicle. They also provide many other benefits to the employer including maintaining overall consistency in the workplace; establishing, in writing, the culture, mission and philosophy of the organization; defining the employer’s expectations; and formalizing any work rules. By stating these items, many employers have found that handbooks have helped them to avoid any employee misunderstandings, have clarified work rules that supported any disciplinary actions, including terminations, and have helped to avoid any potential charges of discrimination or wrongful discharge. Finally, handbooks have provided a vehicle to “market” the organization to their current and future employees. While employers often develop professional materials “to sell” to potential customers, shouldn’t they take similar steps to explain to employees why their organization is a great place to work? Handbooks can help in that process.

Handbooks, however, are not written without some peril. The courts have, in some cases, established that they are a binding contract. In addition, if employers are not prepared to follow or keep the promises they establish in their handbooks, then they can expect both poor morale and run the risk of expensive lawsuits. So what should they do? How can they realize the real benefits of an employee handbook while minimizing the potential risks?

Employers should be prepared to follow the guidelines they have established in their handbooks. After all, wouldn’t they expect their employees to do what they agreed to do? Handbooks should also be carefully drafted to insure that they contain appropriate disclaimers and clarifications of the employers’ intent. Employers generally want to maintain discretion in operating their business, and by including the appropriate language, they can retain this. So what should be included in the handbook in order to protect the employer?

Some of the steps employers should take include the following:
Clearly state that the handbook does not create a contract, either expressed or implied
Include management disclaimers in the handbook. State that the handbook does not alter the “at-will” relationship between the employer and employee.
Reiterate that the handbook is for information purposes only. Handbooks are not all inclusive, but merely a set of guidelines.
Avoid certain language such as “probationary”, “job for life”, “due process”, “just cause” or “employee rights”.
Have your corporate attorney review the final version of your handbook.

Employee handbooks are an excellent tool for effectively communicating to employees. If well written and followed, the benefits can far out-weight any potential risks.

This Employee Handbook article is for informational purposes only and does not constitute legal advice.

Rick Dacri is a human resource consultant, featured speaker at regional and national conferences, and author of the book “Uncomplicating Management: Focus On Your Stars & Your Company Will Soar.” Since 1995 his firm, Dacri & Associates has helped organizations improve individual and organizational performance. Rick connects with people in a positive and challenging way to offer practical solutions. He can be reached at 207-967-0837, or via email at rick@dacri.com