Employee handbooks provide an excellent tool for keeping good workers -- a primary concern of industries across the nation, said Geoffrey Glaser at the ninth annual convention of the National Trailer Dealers Association, held September 17-19 in Seattle, Washington.
"The number one issue that employers from all industries across the nation are dealing with today is finding and keeping high-quality employees," said Glaser, an attorney with Human Resource Enterprises, a consulting firm in Flossmoor, Illinois, a suburb of Chicago.
Forty percent of current employees are unqualified to handle their jobs, according to a nationwide survey conducted by the Society of Resource Management, he said. If employers decide to fire these workers so they can hire others to replace them, they will have another problem: Sixty percent of job applicants don't have the skills to do the work.
"So basically it doesn't pay to get rid of somebody, because you've got a 60/40 chance you can't replace them with somebody better," Glaser said. "Retention becomes an issue, and handbooks are a wonderful way to handle this issue."
Employees Seek Recognition Employees today are looking for more than a paycheck. They seek recognition and appreciation, Glaser said. They want to be informed about company issues that impact them.
"An employee handbook is an excellent way for employers to communicate with workers and to recognize their concerns," he said. "A handbook sets out company rules, policies, expectations, and disciplinary procedures. That's what employees would like to see in writing."
Employees want to be treated fairly, Glaser added. Handbooks can provide companies a basis of fair treatment by detailing procedures for handling similar work situations. If these procedures are followed, employees will be treated consistently. The belief that they will be treated fairly boosts employee morale.
"Some employers say that they don't want handbooks because they want to retain their flexibility," he said. "But they really want to play games -- to treat their employees one way this time and another way the next. But favoritism and unfair treatment always come back to haunt you."
Another faulty argument employers use against handbooks is that they give their employees rights that they don't have now. Employers are opposed to putting policies in writing for fear that employees will hold it up and use it to get out of work.
"Your head is stuck in the sand if you think that your employees don't already have the rights they need," Glaser said. "Putting your expectations in writing does not give them anything more than they already have. That's an unfounded fear."
Small Company Examples Even small family-owned companies -- like many in the trailer industry -- need employee handbooks to protect them from lawsuits. "Don't tell me that your company is small and has an open door policy," Glaser said. "It doesn't work in today's world. It's not a good defense."
Glaser gave a real-life example of working with a client company to revise its handbook. The issue was overtime pay. The company's policy provided for overtime for more than 40 hours of work per week. But company managers differed on their definition of 40 hours.
"Is it work time only, or does it include time off for personal days, sick days, and holidays?" Glaser asked. "We asked the payroll clerk who said that she didn't know. She said she paid whatever company supervisors told her to pay. And the supervisors gave three different answers. Employee pay really depended on what a supervisor put down on the time card.
"However, the employees knew exactly how their pay was figured. Of course, the ones who got everything included in the 40 hours were happy, and the ones who didn't get the 40 hours calculated the way they wanted complained. What does that small issue do for morale in the workplace?"
In another incident involving a small, family-owned company, Glaser received a call from the private executive secretary asking about maternity leave. Though the company had no policy in writing, the owner gave the secretary six weeks of leave with pay. But this generous offer wasn't enough for the secretary. Her leave extended over Christmas and New Year's when the company office shut down for three days. The boss gave employees these days off with pay.
Follow the Handbook "The secretary called me because she wanted those three days tacked on to her six weeks," he said. "This kind of incident shows the faulty thinking of employers who say they don't want employee handbooks because their companies are small and everyone knows each other. They say that an employee who needs something merely needs to ask. That doesn't work. They don't always come to see you and ask." The only downside to having an employee handbook is not following it, Glaser said. "Don't have a handbook if you're not going to use it because if you don't follow it, you are saying you don't want to be bound by it."
Besides being an excellent tool to communicate company policy to employees, the handbook provides benefits to the employer. First, it is a defensive tool.
( An employee handbook is not required by law, but one law, the Americans with Disabilities Act (ADA), requires that employers who communicate with their employees by some form of written handouts must communicate the company's obligations under the ADA. Specifically, the company must state in writing its agreement to make reasonable accommodations for people who are disabled. "That must be handed out to every employee to be in compliance with that federal law, if you hand them anything," Glaser said.
( Sexual harassment law: It doesn't require employers to have a handbook, but it does say if they communicate with employees by some form of written handouts, they have to include a sexual harassment policy.
( Wrongful termination: More than 200,000 employers were sued by ex-employees in 1997. The best way to defend against a wrongful termination suit is to have a handbook stating that employment is at will. Many states -- excluding California -- recognize employment at will as a major definition of the employment relationship between the employer and employee.
Defense Against Suits ( Unemployment compensation: In Illinois and Indiana -- and possibly in other states -- the best defense against paying this expense is having an employee handbook, Glaser said. If employers can point to written company rules that were violated by ex-employees who were fired, they can win these cases. Without the handbooks, they invariably lose.
( Worker's compensation: "You can use the handbook to defend a worker's compensation case if your handbook says all injuries must be reported to the company owner or to somebody in the organization," he said.
Besides helping companies defend themselves against lawsuits, employee handbooks can be used to keep labor unions from organizing company employees.
"Unions promise to get a contract with company management that has rules so that employees know what the rules are," Glaser said. "They also promise a grievance procedure. But if you have an employee handbook, you've got the rules and the employees have the rules. And you have a problem resolution policy already in print."
A third reason for having an employee handbook is to provide guidelines for company workers, he said. The guidelines state the employer's expectations of employees and tell them what they can expect from the employer.
"I have a term I call JOC -- job-related, objective, consistency," Glaser said. "It's the guiding rule in handling human resource issues. Employers must be able to justify their actions (firing an employee, for example) in terms of it being job-related -- that is, measurable, observable, provable.
"Consistency is the killer in many wrongful discharge cases because you treated people differently. That opens up an excuse or argument that you are discriminatory and play favorites. But if you have a handbook, you have consistency for all your supervisors, for all your employees. Everybody knows what the rules are."