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Three Principles for the Perfect Employee Handbook

Why are “cool” companies still using handbooks that look like they were made for a manufacturing facility back in the 1970’s? We review hundreds of handbooks, and unfortunately, almost all of them are completely negative documents about all the ways employees can be punished. Is that really what you want to communicate to your most valuable asset, your people?

New employees are excited to start working with you. But instead of building on that enthusiasm, most companies scare their new hires by handing them a 100-page rulebook of ways they can get in trouble.

There’s so much contradictory advice out there, it can be overwhelming. Well, we're here to set the record straight. As an employer, your handbook only needs to do three things:

1. Protect the company;

2. Communicate expectations and rules to your team; and

3. Help promote your organization’s brand and values

That sounds simple, but rarely do we see all three items in practice. So, how do you create the perfect handbook? Ensure it follows these principles:

#1 Protects the company

There are two main violations of this rule. Either you have written policies that you don’t actually follow; OR, the way the policies are worded handcuff the company to act a certain way.

Do you have policies in your handbook that you don’t follow? Plaintiff attorneys love to point out those policies to show that you are either a liar or unfairly treated their client. In reality, management was probably unaware that the company even had a policy about how they were supposed to handle that certain situation. If you don’t follow it, why is it in your handbook?

The other common violation of this rule is when your policies contain absolute wording that handcuffs the company. Do your policies read “in the instance of (blank) the company must . . .” or “the company will . . .” followed by exact steps the company must take? If so, you’re locking yourself into always taking that action. The burden will be on you to show the reason you deviated from the policy was not discriminatory in nature. Why start off placing an additional burden on your organization? Replace absolute language.

Once you’ve fixed those two main violations, we also recommend your handbook:

- reinforces employment at will

- offers grounds or support for your employment decisions

- provide affirmative defenses when faced with an employee charge or lawsuit (e.g., policy informed employees on how to report harassment, but charging party failed to report it)

- Complies with applicable state and federal laws that mandate notification of employee rights, such as FMLA (and, don't include FMLA if you don't need to)

Once you’ve made sure your handbook is protecting your company, we recommend ensuring the manual also:

#2 Communicates Expectations & Rules to Your Team

What issues are you constantly reminding employees of? Put your expectations in writing in the handbook. We know it’s easier to download a pre-made handbook, replace “[Company Name]” and then call it good. But, why even have a handbook if it’s not going to address the items that make your company unique?

Remember when writing your expectations to always adhere to rule #1 Protect the Organization. End the policy with a sentence such as “violations of this policy could result in disciplinary action up to and including termination.” That sentence gives your organization the flexibility to address each situation in a way that makes sense given the totality of the circumstances. There might be mitigating factors where you don’t want to discipline the individual, or there could be reasons why this is a more serious violation than you ever anticipated.

The first two rules are what we consider the absolute minimum, if you want a great handbook you also need to:

#3 Promote Your Organization’s Brand & Values

We almost never see this done. As I mentioned earlier, most handbooks read like they were made for a manufacturing facility back in the 70’s.

Does your company culture emphasize: Trust? Learning? Coaching? Wellness? Fun? Do you offer benefits and time off? Those should all be highlighed in the first few pages.

Use the beginning of the manual to celebrate all the great things going on at your organization. Showcase all the benefits available to employees. Even if you don’t offer traditional benefits, do employees have flexibility in other ways? Communicate and celebrate that!

You spend a ton of money on the benefits you offer. You spend countless hours creating the culture you want your employees to experience. Your handbook should support those efforts.


The perfect handbook would first inform new employees of the company’s values and purpose. It would then showcase the benefits you offer, the culture that is expected and the way you work. Only after you’ve done that should it get into rules and legal disclaimers that protect your company (without handcuffing yourself). If you can do that, you’ll have a better handbook than 99% of companies in our country and your employees will know they made the right decision to join your team.

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