A company’s employees are often its most valuable resource. Unfortunately, misunderstandings or disputes with employees can also lead to some of a company’s biggest and most expensive headaches.
Workers are increasingly turning to the courts with claims such as wrongful termination, discriminatory treatment, unsafe working conditions and harassment. Employers, sobered by huge jury awards, are increasingly shelling out thousands of dollars to resolve even minor disputes. The financial effect of an employee lawsuit can be particularly devastating in a small business.
While there is no magic potion to eliminate employee disputes, a business can minimize costly headaches by maintaining good personnel practices. At the heart of such practices is the employee handbook.
A well-written and carefully used employee handbook can reduce the risk of lawsuits and can be a company’s first line of defense when disputes arise. Additionally, an employee handbook informs employees of workplace rules and provides guidance to supervisors and managers in implementing policies.
The lack of an employee handbook often results in ad hoc decision making, inconsistent treatment of employees, and misunderstanding and confusion regarding personnel policies. In some cases, it can even lead to unintentional violations of the law, resulting in unnecessary penalties and liability.
Small businesses, in particular, often forget to establish formal personnel policies. Without the luxury of a separate personnel manager or personnel department, a small employer often adopts the attitude, “I’ll deal with personnel problems when they come up.”
The problem with this approach is that complaints or disputes with employees will invariably arise in a wide range of areas, including matters such as absenteeism and tardiness, vacation and sick leave, performance and salary reviews, termination of employment, and harassment, to name a few. . few. If an employer has not established clear written policies regarding such issues and has applied them consistently, a disgruntled current or former employee will be in a strong position to successfully challenge the company in court or before the Labor Commissioner, exposing the company to potentially important liabilities. .
By taking a proactive approach and defining its personnel policies before disputes arise, a company not only avoids accusations of arbitrariness and bias, but also gains greater control over the workplace. Instead of simply responding to staffing issues one by one as they arise, a company can use an employee handbook to take the lead in setting rules and priorities for its workers. Employees, meanwhile, are alerted to what is expected of them.
To maximize the benefits of an employee handbook, an employer should take the time to carefully review the handbook with all new employees. Additionally, employee feedback should be encouraged to identify policies that are confusing or outdated.
By establishing and following a good employee handbook, a company can ensure that it complies with legal requirements and provide a basis for resolving misunderstandings or disputes with employees. When forced to appear in court, that company will also be in a much stronger position to defend itself.
Additionally, a company that maintains a well-designed employee handbook can expect improvements in employee morale and efficiency. Workers who feel they are being treated fairly and consistently are likely to be more loyal and more productive.
In short, establishing and maintaining a good employee handbook is the best preventative medicine and will pay many dividends in terms of professionalizing the work environment and minimizing costly disputes.
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