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| A Reprint From:
Business Advisor |
July/Aug
2000 |
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On
the Books
By Shiara M. D�vila |
Small business owners
should adopt a
written employee handbook of policies
and procedures. |
| The
image of a thick, dust-veiled binder confined to the corner of a
desk or the enclosure of a drawer may dissuade small business owners
from investing in employee handbooks. With the ever-present threat
of litigation, however, experts advise that small business owners
reconsider. Richard A. Sherwood, Principal of Innovative HR
Solutions, a consulting firm in Daly City, Calif., advocates the use
of employee handbooks for all companies. "Handbooks can be
valuable tools that set rules and guidelines," Sherwood says.
"They give a framework for new employees to get off on the
right foot." According to Sherwood, small companies often
resort to memos for keeping employees updated on policies and
procedures. He says that businesses should have just one document
addressing employee's concerns, such as employment, compensation and
benefits. |
The
Price of Protection
Richard Eisenberg, owner of M.J.M. Maintenance Co.,
considered adopting a set of written guidelines for his commercial
janitorial company in Glendale, Calif., but decided against it.
"It would require a considerable amount of time
and effort to put together [a handbook], and there would be no
foreseeable benefit from doing so," Eisenberg says.
He acknowledges that the possibility of litigation is a
concern but contends that hiring a consultant to compose an employee
manual and a legal expert to inspect it is an "extremely
expensive proposition."
Eisenberg faces an added issue of translation.
"Most of my employees are not using English as their primary
language, so the book would have to be translated," he
says.
Like many employers, he considers the consequences of
inaction while mulling over the idea of inadvertently harming his
business if he acts.
"As a small business owner,
I have a very limited knowledge of the laws that relate to human
resources, and I would not want to make a mistake that could cause a
problem later -- in either saying something I shouldn't or leaving
something out," Eisenberg says.
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Resources
BLR Encyclopedia of Employee
Handbooks,
by Stephen D. Bruce. 1986.
Employment Policy Foundation,
www.epf.org allows visitors to search through documents about
human resource policies and practices.
Society for Human Resource
Management, www.shrm.org provides information on an array of
human resource topics including the use of employee handbooks.
BizManual, www.bizmanuals.com
creates and publishes software to create prewritten employee
handbooks.
Policies Now!, by
KnowledgePoint is software that helps write employee handbooks and
features customizable personnel policies and an automatic research
capability.
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Do
It Yourself
Although experts consider handbooks necessary, they discourage
business owners from attempting to write the manuals themselves.
They warn that a poorly written handbook could precipitate a
lawsuit.
To avoid being cast in a courtroom drama, some small
business owners adapt prewritten manuals to fit their needs.
Prewritten handbooks range between $85 and $200. The price of a
custom-written handbook, in contrast, can range from $1,000 to
$2,500.
BizManual, a company in St. Louis, specializes in
developing and publishing software for creating employee handbooks.
It sells to businesses in countries ranging from Canada to Hong
Kong. Because laws and regulations differ from country to country
and state to state, careful editing of the prewritten guides is
necessary, says Tony Havlin, BizManual's sales manager.
Federal laws governing employment practices vary based
on the number of a company's workers. However, Havlin says small
business owners should consider the use of a formal company
guidebook when they hit the 10-employee mark.
James A. Turner, president of the Chicago chapter of
the Society for Human Resource Management, advises that small
business owners check the validity of software with a labor attorney
before selecting a program.
Turner, who is also vice president of business
development Orbit Consulting Group LLC in Chicago, suggests
consulting a labor attorney once an employer has tailored a
prewritten guide, to ensure that the book is up-to-date with state
and federal laws.
A Worthy Investment
Laura Dowling, vice president and co-owner of Elephant Dreams Inc.,
a wholesale home and garden accessory company in Hayward, Calif., is
updating her company's employee handbook with software from her
local chamber of commerce.
"We don't have a zillion
policies, so the customization is standard," Dowling says.
"To me the biggest things are the labor law issues. I do feel
confident that they have that covered."
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Dowling and her husband adopted the employee
handbook when they bought the company two years ago. Employees of
Elephant Dreams sign a form acknowledging that they received the
manual and will follow the guidelines. The handbook helps resolve
employee conflicts and defines expectations, according to Dowling.
"It definitely gives the employees the impression
that you are a professional company," she says.
Los Angeles-based attorney Jim Zapp, who specializes in
employment law, says employee handbooks serve as legal shields only
if business owners are committed to following the rules established.
"Once they put something in a handbook, it's
important for the small business owner to realize that that is a
commitment he or she has made," Zapp says. However, they should
constantly revise the book. "Things change and policies change;
it is necessary to keep [flexible], so you don't have to breach your
handbook to get what you want," he adds.
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Handbook
Essentials |
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Richard A. Sherwood,
Principal of Innovative HR Solutions, a consulting firm that
provides human recourse programs for small to mid-size
companies in Daly City, Calif., recommends that employee handbooks
address the following issues: |
- Employment
- Equal opportunity
statement
- Schedules
- Working hours
- Compensation
- Annual review
process
- Salary progress
- Incentives
- Benefits
- Retirement plan
- Vacation
- Holidays
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- Health insurance
- Leaves
- Sick day policies
- Family and Medical
Leave Act
- Personal time
- Jury duty
- Bereavement policy
- General
- Confidentiality
- Travel policy
- Parking
- Safety
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