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The value of having written policies: but in what format?

The value of having written policies: but in what format?

By Yosie Saint-Cyr, LL.B., Managing Editor, HRinfodesk, published by First Reference, November 2009

Several personnel managers I've talked to have told me that they are getting contradictory information concerning the usefulness and value of having written policies. On one hand, they are being told that having written policies is a way of communicating their organization's values, rules and practices to employees. On the other hand, a number of lawyers are warning them that poorly drafted policies could land them in court. Well, these positions are not contradictory, but are both right. Well-written policies can both serve as an effective communication device and help you stay out of court, or at least give you a better chance of preventing unnecessary miscommunications or incidents.

Policies and procedures (standard practices) are statements and guidelines of how the business and employee relations will be governed, and are directives for administrative practices and controls that must be observed. Moreover, a policy lays out what management wants employees to do, and a procedure describes how it should be done. Procedures describe exactly how to carry out the policy and contain much more detail.

The latest HRinfodesk poll question asked poll participants if they had a policy manual and/or an employee handbook. Out of a total of 369 respondents, 268 (72.63%) had written policies. Written policies are usually communicated either through an employee handbook or policy manual: 124 (33.61%) respondents had either a policy manual or an employee handbook; while 144 (39.02%) had both. Very few respondents had neither or believed they did not need one or the other or both. However, some respondents (34 / 9.21%), although few, indicated that they did not have written policies but were working either on a policy manual or employee handbook (see the table below for more details).

This commentary will help you understand the value of having written policies, as well as the difference between a policy manual and employee handbook, and if you should have one or the other, or both.

What is a policy and procedures manual (policy manual/supervisory manual)?

Companies develop policy manuals to help both managers and employees run the organization. It is a method to establish the management rules and guidelines of the organization.

As a company develops its policies, they become a framework for consistency and fairness. Policies define management's standards for making decisions on various personnel and organizational issues. Clearly defined procedures and standards, derived from polices that are well thought out, express the company's intent to make consistent and even-handed decisions.

They are developed in light of the mission and objectives of the company, and they become the media by which management documents and communicates its plans, rules, intents, expectations and business processes to all staff. In addition, supervisors and managers are more likely to consistently apply policies that are clearly communicated in writing.

What is an employee handbook?

An organization will usually have an employee handbook because it already has policies (a policy manual). The handbook summarizes your rules (policies) and expectations to employees in a very simple way, in a style and format that is easy to use. The handbook may reference the policy manual, but is not written in such a formal way.

Usually, the statement that forms the policies in the employee handbook is derived from the policy manual. The employee handbook usually does not include information about supervisory procedures.

An employee handbook is a manual that consists of several policies, which an employer will provide to new employees in order to acquaint them with their new company and its workplace policies. When distributing the employee handbook (new or revised) to employees, it is highly recommended that the employer include a separate acknowledgement form to be signed by the employee and returned for retention in the employee's personnel file.

The simple act of putting your policies in writing in an employee handbook should not create a binding contract if the policies are written as guidelines that explain generally or typically what you require of employees and how you will normally treat them. However, you can create a contract by using "legalese" and language that conveys rigid rules that employees must follow exactly as written in all circumstances. You should build flexibility into your wording and steer clear of any promises that could be interpreted as a contract. Instead, you should use terms such as “generally”, “usually” and “may” so that managers have flexibility in applying the policies in your employee handbook. In addition, you should specifically retain management's right to update, change unilaterally and implement all policies in your employee handbook as management sees fit.

In addition, the employee handbook must contain proper disclaimers.

What is the difference between a policy manual and an employee handbook? Which should we have and why?

Generally the difference between an employee handbook and a policy manual relates directly with the intended audience.

A policy manual—which for all intents and purposes is a supervisory manual—is generally intended as a guide for managers and supervisors and contains information that they need to implement the organization's policies. Thus, a supervisory policy usually provides a detailed statement of policy followed by several comments and greater details that instruct managers how to apply that policy. With a well-crafted policy and procedures manual, supervisors and managers are more likely to apply policies consistently. The policy manual often include forms used by human resource professionals or personnel managers.

Usually, managers and supervisors receive training on what the manual contains and how they should apply the policies and use the forms and notices. Policy manuals ordinarily are not distributed to general employees.

In contrast, an employee handbook is designed for broad distribution to all employees. It is typically intended to provide general information about the organization's practices, benefits, hours of work, pay policies and work rules. It usually does not include information about supervisory procedures.

At a minimum, you should have an employee handbook that explains your policies to employees. Many organizations, especially as they grow, also have a supervisory policy manual to ensure that their managers understand how to implement the policies. As a practical matter, having supervisory instructions may be especially prudent in today's legal climate where any inconsistent application of policy can result in a discrimination claim.

Are you required to have written policies? No provincial, territorial or federal law requires an organization to have a policy manual or employee handbook. However, there are certain policies that are required by law. Every organization should have a published privacy policy, violence in the workplace policy, health and safety policies, and a written policy about non-discrimination and harassment as well as sexual harassment. Rather than have five separate policies, these can be combined in a comprehensive manual and summed up in the employee handbook.

There are benefits to having both an employee handbook and a policy manual as well. Companies can cover important general topics, such as sexual harassment, in an employee handbook, but leave other items that might cause problems in employee handbooks, such as progressive discipline guidelines, in policy manuals where they are far less likely to create unintended contracts.

Sound employment policies have a positive impact on employee relations. A human resources policy manual and an employee handbook describe to both managers and employees what the company expects of them, what the company workplace policies and benefits are, and prevent misunderstandings.

Employers can use a carefully written policy manual and employee handbook to illustrate their commitment to a positive work environment and non-discriminatory employment practices.

Clearly, the scope and purpose of these two documents are quite different. Because of these differences, employers should not attempt to use one manual to serve both purposes.

Resources and tools

First Reference makes the job of building a policy manual easy. Human Resources PolicyPro has been providing Canadian businesses with an effective way to understand their legal obligations and establish authoritative and reliable policies and procedures, based on the minimum legislative standards and best practices. For more information on what the publication offers, visit the First Reference website at www.firstreference.com/hrpp.



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