The Necessary Evil of Employee Policies

October 16, 2012, by HR à la carte | Work Environment and Policies

One of the most frequent complaints we hear from business owners is that they hate policies.  I’ll share a secret with you; we HR professionals do not particularly enjoy them either.  However, we’ve experienced firsthand their value.  Think of them as a necessary evil, like your home or auto insurance.  Employee policies are similar; you find out you truly need them when it counts. 

Why are policies so important, especially to small business owners? 
1. They reduce your risk of having to pay hefty severance costs if you do need to fire an employee.
2. They help set a level playing field for your managers and employees as your business grows; like “standard operating procedures” for your business.
3. They help you reinforce the tone of your company’s culture.

Reducing Your Risk

One of the first questions an HR professional will ask you when you want to fire one of your employees without severance pay is to see the relevant policy.  Here’s what we are looking for:
• Did your employee know what the expectations were and were they clearly outlined in writing and easily understood?
• Do you have proof that your employee knew about and understood the expectations?
• Were your other employees aware of the expectations (are all of your employees treated in a similar manner)?
• Was your employee given a reasonable chance of meeting those expectations?

If the answer is no to any of the above questions, chances are you do not have sufficient cause to fire your employee without payment or notice.  You will need to provide some sort of severance package. 

Levelling the Playing Field

As your business continues to grow, you will begin to receive questions from both managers and employees, such as “Why did Mary’s manager let her take half a day off to resolve a personal issue, but my manager won’t let me?” and “Bruce’s aunt just passed away and I’m not sure how much time off to give him?”  Growth pains for any business often first centre around time and attendance issues as well as paid-time-off issues such as standardized vacation practices.

By having “standard operating procedures” for your business your managers and employees will know what the accepted practices are that you wish to see going forward.  This will help your managers to manage better and your employees will know what is expected of them.  Then, if there is ever any issue both your managers and employees have something in writing to refer to in order to help guide them.

Reinforcing Culture

Finally, employee policies are a very cost effective way of helping your new employees understand your business, its brand and your company’s culture.  One of the very first documents they should receive when starting work at your business is your company’s employee handbook.  If your business is a small, fun, and casual business, your handbook should be written in a fun and informal way.  If your business tends to be on the more formal side, then the language in the handbook should match that.  Even the choice of what policies to include in the handbook will reinforce the culture of your business:

•  You really value volunteer work or giving back to the community?  Then consider including a policy that allows employees time off, paid or otherwise, to volunteer for a set number of hours in the community in which you operate.
• You have a very casual work atmosphere but don’t want employees showing up in ripped jeans every day?  Then a casual dress code policy outlining what that exactly means would be helpful.

Employee policies save you time and money when dealing with employee issues, help your managers manage more effectively, your employees understand what’s expected of them, and reinforce your company’s brand and culture.  Make sure you don’t go without your company’s insurance in the form of employee policies for another year.  It may catch up with you in the end.