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How to Create an Employee Handbook For Amazing Work Culture

An employee handbook can be so much more than legal jargon and overused buzzwords. Make your handbook the foundation of your company culture.

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Picture this: It’s day one for your new employee. They arrived early, eager to prove themself, and they…

Sit down to a towering binder chock-full of terribly dry legal jargon and overused buzzwords. 


Maybe it’s time to update your employee handbook. 

Why, you ask? Because 80% of new employees1 with effective onboarding rate their organization’s performance as “strong” compared to only 11% of employees who received ineffective onboarding. 

And that’s not to mention the 38% who were confident in their ability to do their jobs or the 49% who reported contributing to their team within the first week!

How do you create an employee handbook that can serve as the foundation for a successful employee orientation? 

Let’s jump in and find out! 

What’s An Employee Handbook?

An employee handbook is a document that provides employees with information on their rights and responsibilities, as well as the policies, procedures, and expectations of your organization. The handbook is often a new employee’s first introduction to the company’s inner workings. 

Creating an employee handbook is important because it ensures that everyone knows what they’re expected to do, how they should behave at work, and the consequences if they don’t follow those rules.

Let’s start with a quick refresher on the differences between policies, procedures, and expectations as they apply to creating a handbook. 

Company policies outline the rules, guidelines, and principles that govern employee behavior, ensuring consistency and fairness.

Procedures detail the step-by-step processes for performing specific tasks or handling situations, providing clarity and efficiency.

Setting clear expectations helps employees understand what is required, promoting accountability and productivity.

The Role of the Handbook In Onboarding New Employees

Onboarding is the process of introducing new employees to your company’s culture, policies, and procedures. It’s important to have policies in place for onboarding because it helps with consistency and gives new hires an idea of what they can expect from day one.

When creating your onboarding policy, consider what you want to include:

  • How long will it take them to get up to speed?
  • What kind of training do they need?
  • What type of mentorship will they receive?

A great onboarding program will help your new hires feel welcome and supported while also helping them become productive as soon as possible. It should provide a clear path to success and allow employees to find their own way. 

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Transparent communication in a handbook provides clarity, consistency, trust, and better alignment between company expectations and employee understanding.  

Why Is It Important To Create An Employee Handbook?

Employee handbooks are important because they help you to comply with local, state, and federal laws. They also make it easier to be organized and efficient.

A great employee handbook is key to creating a thriving company culture that fosters trust between employees, managers, and executives. It helps create a clear understanding of the values and expectations of your organization as well as how employees should conduct themselves while at work or on company property outside of working hours (e.g., in-office social events).

An employee handbook can also help to protect your company from lawsuits. A good employee handbook should include information on handling workplace disputes and disciplinary actions and what it means to be a part of the company culture. It should also outline policies related to things like sexual harassment, discrimination, and other issues that could lead to legal action.

What Is In An Employee Handbook?

There are many things to consider when creating an employee handbook2 You want it to be easy for employees to understand but also thorough and complete. 

If you’re looking to start drawing up an employee handbook immediately, here are some topics to consider, depending on what your company offers and expects of employees. 

Company Information

  • Company Mission Statement
  • Values Statement 
  • Company Culture 
  • Code of Conduct

Policies, Procedures, and Expectations

  • Compensation
  • Pay Periods, Paydays, and Overtime 
  • Vacation, Sick Time, and Medical Leave
  • Communication 
  • Meals and Breaks
  • Time Tracking
  • Dress Code
  • Employee Resources (Mentoring, Continuing Education, Etc.)
  • Performance Reviews
  • Disciplinary Action

Employee Benefits 

  • Retirement
  • Healthcare
  • Workers Compensation
  • Social Security Benefits
  • Unemployment Insurance
  • Other Perks, Discounts, and Rewards

Legal Disclaimers and Employee Acknowledgement Form 

  • Employment-At-Will Disclaimer
  • Equal Employment Opportunity (EEO) Disclaimer
  • Disclaimer Regarding Advice or Legal Representation
  • Confidentiality Policy
  • Safety Policy
  • Acknowledgment of Receipt Disclaimer
  • Other relevant disclaimers for your company and industry 

What To Include In Your Handbook

Welcome Message

This will include a brief introduction to the company’s mission, values, and culture. You can learn all about creating a company mission statement from 23 Killer Mission Statement Examples (& How to Make Your Own)

You can add value statements and their corresponding philosophy, for example:

Customer Obsession: “Our customers are at the heart of everything we do. Still, it’s over their success, delivering exceptional experiences that exceed their expectations.”

Company culture is the way that your organization functions, including its people, processes, and products. It’s essential to define your company culture in ways that are meaningful to you and that align with your business strategy. For example:

  • “We are passionate about making a positive impact on the world, and we encourage our employees to contribute to causes that matter to them.”
  • “Work hard, play harder – our culture is a playground of epic adventures and a sanctuary for achieving work-life nirvana.”
  • “Transparency is our secret sauce; we spill the beans, foster open dialogue, and ignite a wildfire of collaboration.”

It’s also important for employees at all levels of the organization—not just managers—to understand what these statements mean for them on a day-to-day basis by putting them into action through their words and actions (or lack thereof).

You can also add information about the company, such as an organization overview, history, and structure.

Action Tip: We highly recommend including a video along with your Employee Handbook. This can be from the founder, hiring manager, or colleague. This adds a personal touch.

Communication Guidelines

Ready for a whopping statistic? A study of 400 companies3 found that poor communication to and between employees resulted in an average loss of $62.4 million annually!

Employee communication is key to company success. It’s also crucial for creating a thriving company culture, which means you should ensure your employees know what’s happening at all times.

It’s helpful if employee communication is clear, consistent, and transparent. You want your employees to feel like they can trust you and not fear what might happen next. That means being honest with them (even when it’s difficult) and respecting their opinions while listening closely to make everyone feel heard.

Employee communication should be timely, regular, and ongoing so that everyone knows what changes are coming up or why something has changed in the first place—and how those changes will affect them personally.

Offer guidance on effective workplace communication, including email etiquette, use of company communication tools, and any rules regarding social media use. And, of course, don’t forget the importance of Body Language For Work

Action Tip: Consider implementing a “Language of Appreciation” section in the communication guidelines, encouraging employees to express gratitude and acknowledge each other’s efforts through personalized messages, handwritten notes, or small tokens of appreciation to enhance workplace morale and camaraderie.

Code of Conduct 

This can be included early on as an overall vision of the company or later in the policies section. A code of conduct is a set of ethical standards and behavioral expectations for employees, including guidelines for professionalism, honesty, integrity, and appropriate use of company resources.

Establish purpose and scope by identifying the values, principles, and behaviors important to your organization. 

Next, outline expectations and guidelines for specific behaviors and actions that are expected from employees. 

Finally, as applicable, incorporate reporting mechanisms and consequences to clearly communicate the employee’s responsibilities. 

Consider this example for an architecture firm. 

Designing the future with integrity and innovation, our Code of Conduct at XYZ Architecture Firm embodies a harmonious blend of professionalism, where ethical lines bind our sketches, our structures soar with sustainable vision, and our collaboration paints masterpieces that celebrate diversity and inclusivity. 

Action Tip: Think about how you want employees to feel when they come to work. Do you want them to be excited, inspired, and passionate? Do you want them to feel like they’re an important part of a team? Do you want them to be confident they can find solutions to complex problems? Write down several sentences describing an ideal attitude, and tailor your handbook to focus on eliciting that attitude. 

Work Schedule and Hours 

Some of the most basic information an employee will need to know is when they are expected to be at work, for how long, and other scheduling details. Provide information about 

  • Regular work hours
  • Break times
  • Attendance
  • Punctuality

If schedules rotate, you’ll want to clarify how the schedule is determined and when and how they will be notified. 

For example, if you are writing a handbook for an animal shelter, does the employee need to plan to be on call for night shifts? If so, how often, and how does that impact their regular day schedule? 

Leave Policies

Let’s face it; this is the section that new employees are probably most curious about. And as an employer, it’s to your advantage to encourage employees to take vacation time. According to research4, physical complaints, sleep quality, and mood improved after vacation time… and the effects lasted up to five weeks!

You can include information about vacation, sick leave, parental leave, bereavement leave, and other types of leaves, including the procedures for requesting and approving leave.

When creating your employee handbook, it’s important to explain the company policy on vacation time clearly. Think carefully about all the questions an employee might have about how to go about requesting time off.

Consider these questions your employee might have, and address them in your handbook. 

  • How much vacation time am I entitled to?
  • Is vacation time different from sick time? 
  • How is vacation time accrued or earned?
  • Are there any specific rules or limitations on using vacation time?
  • How far in advance do I need to request vacation time?
  • What is the process for requesting and getting approval for vacation time?
  • Are there any seasons when vacation requests may be restricted?
  • Can I carry over unused vacation days to the next year?
  • Will I be paid my regular salary during my vacation time?
  • What happens if my vacation request overlaps with another colleague’s request?
  • Can I take unpaid leave if I exhaust all my vacation days?
  • What is the process for canceling or rescheduling an approved vacation request?
  • How can I check my vacation balance or keep track of my accrued time?
  • Can I request vacation time in advance before I have accrued it?
  • What happens to my accrued vacation days if I leave the company?

The important part about vacation time is to ensure the policy is consistent and fair to all employees.

Performance Expectations

For employees to thrive and do their best work, it’s important they understand the performance expectations of their roles. 

The best way to do this is by clearly understanding how you measure performance and what happens when an employee doesn’t meet or exceed those standards. 

Help your employee understand how you measure performance and how often reviews occur (weekly, quarterly, or annually). If possible, include examples of what good/excellent work looks like so everyone understands where they stand at all times.

For example, for a new book editor, excellent work would be delivering edits ahead of schedule, providing feedback that elevates the manuscripts, and demonstrating exceptional attention to detail that enhances the overall quality of the published works.

Include clear expectations for performance, productivity, and job duties, including standards for quality, reporting structures, and performance evaluation processes.

Be clear about the procedure if someone doesn’t meet the agreed-upon standards for their position or fails to improve. 

On the other end of the spectrum, let the employee know how you will acknowledge those who go above and beyond the expectations of their role. 

Compensation and Benefits

Ah, yes, we do love our paycheck. This is another section that will draw a lot of attention. But it’s important to remember and to show your employee that the check they get is only a small portion of the benefits they receive. Be sure to provide as clearly as possible details about

  • Salary
  • Wages
  • Payroll procedures
  • Benefits packages
  • Insurance coverage
  • Retirement plans
  • Any other employee perks or rewards

Action Tip: Spend 10 minutes researching unique benefits that align with your company’s values. For example, if your company believes in financial independence, you might offer Financial Wellness Initiatives for your employees. If social impact is vital to your company, you might consider offering paid volunteer days or donation matching programs. 

Workers’ Compensation

Workers’ compensation5 is a type of insurance that covers employees who are injured on the job. 

If applicable, you should include information about workers’ compensation in your employee handbook. 

It benefits those injured while performing their duties, including medical care and financial support for lost wages or disability. 

For example: if your employee accidentally cuts herself while working at an office supply store and needs stitches and an ER visit, she may be eligible for benefits through your employer’s workers’ comp policy to cover the cost of medical expenses. 

As much as you might wish to skip the legal mumbo-jumbo, don’t! An employee handbook is the official record of employees’ policies, procedures, and expectations. It is the employer’s contract with its workers and provides the terms under which they are hired.

That said, remember to keep your company culture in mind as you structure this section. Just because you need to put it in doesn’t mean it has to be completely void of personality. 

Employment Policies

As required, offer information about the company’s policies, including:

  • employment eligibility
  • equal employment opportunity
  • anti-discrimination and harassment policies
  • any other relevant policies related to hiring, promotion, termination, and transfers.

For more details on what to include, search websites that list the required policies by state. 

Employee Safety

For industries with safety regulations, include safety guidelines, emergency procedures, and information about workplace hazards, including any required training or certifications. 

For example, for a factory where protective gear is a federal regulation, you may have a section that says: 

It is mandatory for all employees in the factory setting to wear the designated personal protective equipment (PPE) provided by the company. This is a federal requirement in place to ensure employee safety. 

Action Tip: Think outside the box on what constitutes safety! Look into mindfulness training or ergonomic assessments to improve your employees’ health and well-being, thereby increasing their productivity. 

Grievance Procedures

You can’t avoid workplace conflict. It’s just a part of life, and your employees will experience it at some point during their time with you. It’s important for a new employee to feel confident they know where to go if they have any problems. The key is to make sure that everyone knows how to handle it in a healthy way. 

Provide information on how employees can voice concerns or complaints, including the process for reporting grievances and the steps taken to address them.

In your employee handbook, define workplace conflict and explain the different types of workplace conflicts (e.g., issues related to work tasks or projects, personality clashes, disagreements over office policies). Then give examples of how employees should handle each type so they know exactly what steps to take when faced with these situations at work.

For example: “At [Company Name], we strive to maintain a fair and respectful work environment for all employees. We recognize that conflicts or concerns may arise from time to time, and we are committed to providing a clear and effective process for addressing and resolving such issues. This grievance procedure policy outlines the steps employees should follow when they have a grievance or complaint related to their employment.

  • Informal Resolution
  • Formal Grievance Procedure
  • Investigation and Review
  • Resolution and Communication
  • Appeal Process

We are committed to addressing grievances promptly, thoroughly, and in a manner that is fair and respectful to all parties involved. This grievance procedure policy reflects our dedication to maintaining a positive work environment and resolving conflicts transparently and equitably.”

Employee Rights and Responsibilities 

This is an overview of employee rights, including privacy rights, freedom of speech, and responsibilities regarding confidentiality, intellectual property, and data protection. The details of this section can vary widely depending on your industry.

For example, a small start-up with one highly proprietary patent pending would want to clarify the intellectual property responsibilities. Conversely, A large law firm may be more concerned about confidentiality and data protection. 

Action Tip: search “employee policy example [your field or industry]” and look at 2-3 examples to find common topics you should consider including in your handbook. 

Drug Testing

For some companies6,security%2Dsensitive%20industries%20and%20positions., like federal contractors or safety and security-sensitive industries, drug testing is a federal requirement. If your company has a drug testing policy, it should be clearly stated in the handbook. The following is a sample drug testing policy.

Drug Testing Policy: [Company Name] has a zero-tolerance policy for drug use, both on and off the job site. Employees must submit themselves for random drug testing at least once per year, but this may increase depending on the circumstances of your business and its industry needs.*

Drug testing policies should clearly state what kind of drugs they test for (e.g., marijuana, cocaine), how often you’ll be tested, what happens if someone tests positive, and, more importantly, why this policy exists in the first place! 

Disciplinary Procedures

This section, while important, should be kept in perspective. Most employees don’t enter a job expecting to get disciplined or fired. Strike a tone that offers hope for the best but makes clear a step-by-step guide on how disciplinary issues are handled, including warnings, performance improvement plans, and potential consequences.

The first step in handling disciplinary issues is to tell employees what to do if they have a problem with another employee—or themselves! 

For example: “If you witness any behavior at work that makes you uncomfortable or unsafe, please let us know immediately.” 

This encourages people to stand up for themselves and others by setting clear expectations around reporting problems immediately instead of waiting until they’ve built up over time (which can lead to them being too big).

Next comes how the company handles complaints about managers’ performance or conduct towards others within our organization; all parties involved (including those making complaints) should feel comfortable coming forward to avoid retaliation from management team members who don’t want negative feedback shared publicly throughout our organization!

Termination and Resignation

While terminating an employee is not a desirable experience, the policy is a crucial part of your handbook because it will let employees know what they can expect if they leave the company. It may help you avoid legal issues down the road.

The following are some essential elements that should be included:

  • Reason for termination: The reason why an employee is being terminated should be clearly stated in writing so that there are no misunderstandings about whether or not their behavior warrants dismissal. 
  • For example, if an employee were caught stealing money from the cash register and lying about it when confronted by management, this would warrant dismissal because stealing is against company policy (and probably also illegal). 
  • Information about the voluntary and involuntary termination process, including exit procedures, final paychecks, and return of company property.

Employee Acknowledgement Form

There should be a section where employees can sign and acknowledge that they have read and understood the handbook. Below is an example of a standard form: 

I, [Employee Name], hereby acknowledge that I have received a copy of the employee handbook provided by [Company Name]. I understand that it is my responsibility to read and familiarize myself with the contents of the handbook.

I further acknowledge that the employee handbook serves as a guide to company policies, procedures, and expectations and may be updated or revised occasionally. I understand that it is my obligation to review any updates or changes made to the handbook and abide by the most current version.

I understand that the policies and guidelines outlined in the employee handbook are binding during my employment with [Company Name] and that violation of these policies may result in disciplinary action, up to and including termination of employment.

I agree to direct any questions or concerns regarding the employee handbook to the Human Resources department or my immediate supervisor.

By signing below, I confirm that I have received and read the employee handbook and agree to comply with its contents.

Employee Signature: __________________________

Date: __________________________

Printed Name: __________________________

Employee ID: __________________________

Supervisor Signature: __________________________

Date: __________________________

Structure Notes 

There are limitless ways to order and categorize the sections in a handbook. Rather than offering an exhaustive list of everything that could be included, we’ll discuss the most common categories you should consider and offer suggestions for thinking through your own formatting and structuring process. 

Ultimately, your goal is to create a document that can be a resource for your new employees to reference on their own when they have questions to give them a sense of” security and belonging in the company. 

As valuable as a handbook can be, you should view it and present it as a supplement to good communication, not a replacement!

Format and Tone

Googling “Employee Handbook Template” will provide you with various options for boilerplate formats. While this is a fine starting point, your employee handbook is one of the first introductions to the company’s tone and style. 

Consider these different opening lines and how they change an employee’s first impression. 

Professional: “Thank you for joining [Company Name]. This Employee Handbook is designed to provide essential information about our company policies, guidelines, and your rights and responsibilities as an employee. We encourage you to read it thoroughly and refer to it as needed during employment.”

Interactive: “Welcome, [Company Name] Trailblazer! Get ready to embark on an interactive journey through our Employee Handbook. This isn’t your typical read-from-cover-to-cover kind of thing. We’ve sprinkled surprises, quizzes, and challenges along the way to make it a fun and engaging experience!”

Fun: “Hey there, [Company Name] Rockstar! Buckle up and get ready to dive into our one-of-a-kind Employee Handbook. It’s your passport to the amazing world of [Company Name], where we work hard, play harder, and create something extraordinary together.”

Action Tip: Imagine your company as a person. What would they look, act, and sound like? Suit-and-tie straightlaced? Shorts and flip-flops, surfer dude? Rugged flannel shirt hiker? Write down your answer and keep it in view as you work on your handbook. 

Tailoring To Your Company’s Unique Organizational Culture

Employee handbooks are a vital resource for employees and managers alike. Still, it’s important to remember that an employee handbook isn’t one-size-fits-all. 

To create an effective and useful handbook, tailor it to your organization’s specific needs. The best way to do this is by balancing your organization’s interests with those of its staff members–and this means considering what makes your company unique.

For example: If you’re working at a pet store where everyone wears jeans and works with animals all day, having detailed policies about dress code probably won’t be very useful (and could even cause resentment). 

On the other hand, if you run a management consulting firm where most people at your place wear suits every day or work remotely from home occasionally—or both—then having strict guidelines on appearance keeps things running smoothly without causing any confusion or unnecessary conflict among coworkers.

What Not To Include In An Employee Handbook

  • Unenforceable or Illegal Policies: It’s important to consult with legal professionals to ensure compliance with employment laws and avoid any discriminatory or unfair policies.
  • Excessive Detail: Avoid including excessive detail that may overwhelm employees. Stick to the essential policies and guidelines, and provide references or contact information for additional resources if needed.
  • Confidential or Sensitive Information: Avoid including sensitive or confidential company information that should not be disclosed to all employees.
  • Performance Metrics or Specific Targets: Performance expectations and targets may vary across positions and departments, so it’s better to address these matters through job descriptions, performance evaluations, or separate performance management processes.
  • Promises of Future Benefits: Avoid making promises or guarantees of future benefits or changes to compensation and benefits in the employee handbook. It’s essential to maintain flexibility in adapting to business needs and changing circumstances is essential. 

Common Pitfalls To Avoid 

We’ve covered a lot of material at this point! Once you have a draft written out, consider doing a pass specifically looking for these common problem areas:

  • Overemphasis on discipline and termination policies. Overemphasis on these policies can hinder the development of a positive work environment, impede employee morale, and limit opportunities for growth and improvement.
  • Inconsistency with Employment Laws: Ensure your handbook complies with local, state, and federal laws governing employment, such as anti-discrimination laws, wage and hour regulations, and leave entitlements.
  • Failure to Update: Neglecting to regularly review and update the handbook can result in outdated laws, regulations, and company practices. Schedule a recurring annual event in your calendar to review the handbook you’re responsible for. 
  • Overlooking Inconsistency: Review the entire handbook to ensure the policies are internally consistent and do not contradict one another.
  • Lack of Flexibility: Provide flexibility where appropriate to address unique situations or individual needs while maintaining the integrity of the policies.
  • Inadequate Documentation: Be sure to have a process to document employee acknowledgments that they received and understood the handbook’s contents.
  • Failure to Communicate and Train: We’ve said it before, and we’ll say it again—merely distributing the handbook without proper communication and training is ineffective. Conduct training sessions or orientations to explain the handbook’s content, answer questions, and ensure employees understand the policies and procedures.

Making The Most Of Your Employee Handbook

A well-crafted handbook can encourage communication and facilitate teamwork within your company. 

Outline in the handbook the organization’s approach to recognizing and appreciating teamwork and collaborative efforts. Describe formal recognition programs or practices, such as employee of the month awards, team celebrations, or peer recognition initiatives. If you don’t have any in place, it’s time to schedule a meeting to discuss it!

If your company has employee resource groups or committees, the handbook is an excellent way to inform new employees about the many opportunities available. You can also mention opportunities for cross-departmental collaboration, training, and development. 

Reinforce in the handbook that communication and teamwork are ongoing processes that can always be improved. Be sure to encourage employees to provide feedback on communication practices, collaboration processes, and any challenges they may encounter. 

Bringing It All Together In One Handbook

Writing a handbook can be a downright entertaining process if you keep focused on your company’s core values and culture. Here are some reminders to get you going: 

  • An employee handbook is a document that outlines the rights, responsibilities, policies, procedures, and expectations of employees in an organization.
  • Creating an employee handbook is important for compliance with laws and regulations and helps organize and streamline operations.
  • A well-crafted employee handbook fosters trust, creates a positive company culture, and protects the organization from potential legal issues.
  • Tailor the handbook to fit the unique organizational culture of the company and consider specific needs and circumstances.
  • Remember that the employee handbook is a supplement to good communication, not a replacement, and it should be viewed as a resource for employees to refer to when they have questions. 

Is it time to rewrite your handbook because your company has moved from in-person to remote, and you’re trying to catch up? Check out The Definitive Remote Work Guide for tips to strengthen company culture virtually. 

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