Employee handbooks are a critical tool in providing important information to employees. They describe what employers expect of their employees and what employees can (should) expect from their employers. They provide critical information about employers and their workplaces and how employees are expected to fit in.

Employee handbooks further formalize the mutual expectations of organizations and their employees. In delineating these expectations employee handbooks create opportunities and risks for employers. Handbooks provide organizations with the opportunity to enhance the value of their human capital, make their organizations more competitive, and improve individual and organizational performance. Conversely, handbooks can impede the achievement of business objectives, increase employment-related liabilities, and reduce managerial prerogatives by making promises or commitments to certain procedural safeguards that the organization did not intend to make. As noted in a memorandum from the General Counsel of the NLRB: incorrectly designed employee handbooks can violate the law and have a “chilling effect” on employees’ activities.

Thus, employee handbooks increasingly provide the opportunity for employers to make their workforce more committed and supportive of their goals. Unfortunately, they also provide the basis for employees’ legal actions - increasingly at the state level - and can significantly reduce employees’ commitment to organizational success.

The purposes and the scope of employee handbook policies and practices are changing and expanding. From a siloed HR activity that creates insular documents concerned primarily with communicating the organizational work rules and benefits, employee handbook policies and practices have evolved into a critical component of an organization-wide management process that maximizes organizations’ achievement of business objectives, enhances the value of their human capital, and minimizes legal risk.

To increase the effectiveness of their employment policies, organizations will have to: 1) enhance their business, operational, and legal intelligence to ensure they have identified the changing external and internal factors that affect their policies; 2) increase internal stakeholder participation in the handbook development process to obtain greater employee commitment and operational alignment; 3) establish new metrics to assess handbook policy and practices performance and measure the achievement of organization goals; and 4) implement internal controls that identify and alert management when employee handbook process failures occur.

Thus, employee handbooks will increasingly have to ensure that they are aligned with strategic and business objectives, are properly drafted, and are effectively implemented. Additionally, they will have to:

• Enhance the employment brand;
• Play a key role in recruitment and retention
• Enhance employee relations, employee morale, and productivity
• Contribute to uniform and consistent application, interpretation, and enforcement of organizational policies and rules
• Protect the organization against claims of improper employee/supervisor conduct
• Reduce the organization’s exposure to employment-related liabilities

From this perspective, employee handbooks will continue to play an important role in communicating with and providing information for employees.