Definitions and References To Help Develop an Employee Manual

Before beginning your employee manual, you may find it useful to consult some resources and to review the definitions of policy and procedure.

The article “The Policy and Procedure Manual: Managing By the Book” by Paul Rao, PhD, is an

excellent resource that offers a sample format and table of contents, along with solid advice on how to put a manual together.

The Small Business Chronicle offers a concise four step plan for writing an employee manual in the article “How Do I Develop a Policies and Procedures Manual?” One step they include that many others do not is asking employees to sign a statement saying they have read and understand the manual.

Always a good resource, the Small Business Administration suggests some excellent reasons to write an employee manual, along with a good list of items to include. There are additional links within the article that may be useful.

One useful definition for the word policy is “a consistent guide to be followed under a given set of circumstances.” Good policies are broad, current, comprehensive, and used frequently.

A procedure is a set of steps for completing an activity. Procedures may outline how policies are implemented, but do not take the place of policies.

An Easy Way To Create an Employee Manual -- and Why You Should

There are myriad reasons for a small business to develop policies and procedures. Some of those reasons relate to efficiency and profitability and some have to do with legal issues. The difference between policy and procedure is that policy is the statement of what should be done, and procedure is the doing. For example, the policy may be to report all expenses on the thirtieth of each month, and the procedure may be to file each receipt in a folder throughout the month, then to fill out the expense report using the receipts.

Having policies and procedures in place, usually in the form of an employee manual, means that your company is prepared for growth. The best time to develop official company policies and procedures is before the company grows. Having a basic employee manual in place gives new employees some structure, and expectations are clear. In addition, a statement of policies and procedures can provide some legal protection for your company.

Setting aside the legal ramifications of having an employee manual, consider the efficiency aspect. When procedures are clear and followed, things are done the same time and again, giving you an opportunity to examine the results. Over time, following the same procedures will allow you to create reports and identify trends.

If writing an all-encompassing employee handbook seems like an overwhelming task, take it on in small segments. Start by simply listing what you do, as you do it. For example, the next time you make a bank deposit, write down each step as you do it. Then, the next time, ask someone else to use your list of steps to make the deposit and “test” your written procedure. Obviously, the more complicated the task, the harder this will be, but it is certainly a way to get started. Finally, keep in mind that policies and procedures can (and probably should) change. Your company will grow and change, so it makes sense that your policies and procedures should too. As you develop your employee manual, build in some flexibility, a process for change, and set specific times in advance to review the manual.