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The Employee Handbook

An effective communication tool for human resources
management
Having associated with Insurance employees' trade Union movement
for more than a decade in India, the Author of this Knol is a staunch
supporter of ethics in human resources management. He was member
of the Standing Committee (General Insurance) and the Working
Committee of the All India Insurance Employees' Association and also
the Regional Secretary of Tamil Nadu General Insurance Employees'
Association, based at Coimbatore, India.

Contents

Introduction
Advantages
Recommended Contents

more

Introduction
It was several decades after the industrial revolution that the requirement of a strategic and
coherent approach to effectively handle the most precious resource of any commercial
enterprise – the human resource – was realized to be an essential ingredient for the success of
the business organisation. Several modern management techniques were tried and tested until
the concept of Human Resources management largely replaced the term personnel
management, as an evolutionary process.

One of the changes brought within the employer-employee relationship during the course of this
evolution has been the emphasis on transparency. Most organisations now consider the need to
be more transparent in their ongoing relationship with their human resources except to the extent
of absolute confidentiality becoming inevitable. As a natural corollary, policies and standards
were sought to be declared, formulated, documented, published and distributed within the
enterprise. One such important document evolved in the process is the Employee Handbook
which is a written-down documentation describing in brief or at length, the policies and
standards relevant to the employment practice adopted by the organisation, facilitating mutual
understanding of the rights and obligations of the parties to the contract of employment.
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Though Employee Handbook is not purported to be the legal document authenticating the
contractual relationship between the employer and the employee, the contents therein can be
relied upon as substantive evidence against allegations of unhealthy labour practices such as
workplace harassment or discrimination.

Advantages
The availability of a periodically updated and properly written Employee Handbook has several
advantages from the points of view of both the employer and the employees. Some of these are
listed below:

1. It facilitates the employer to ensure ongoing communication with the employees, by

providing a consolidated version of work-related information, clearly spelling out what the
employees can expect from the employers and what is expected of the employees
2. It goes a long way in establishing the employer’s commitment to consistent, fair and
dispassionate approach to the management of human resources
3. The Handbook being made available to all cross sections of employees, helps minimize
disputes and promote harmony within the organisation apart from saving the attendant
costs of possible escalation of avoidable issues
4. It helps decentralization of human resources management to the level of immediate
supervisors, facilitating free flow of decision-making on routine matters
5. A well-drafted Handbook also plays an effective role in redressing employee grievances,
the common factor engendering disgruntled employees and quite often bursting into major
labour disturbances
6. In many countries, the statutory requirement of ensuring fair treatment of employees and
good labour practices is sought to be achieved by effective human resources management
practices including distribution of the Employee Handbook
7. An organisation that consistently pursues a policy of keeping the Employee Handbook
updated and circulated or distributed among the employees stands a good chance of
defending its position against legal actions for alleged workplace harassment or
discrimination that are common these days.
8. For new recruits, Employee Handbook is very helpful in engendering a sense of
belonging to the organisation apart from playing a positive role in inculcating the best
industry/workplace culture in them and raising their level of confidence
9. It even helps the immediate family members of employees meeting with work-related
accidents in determining the available recourses to them upon such eventualities and/or
contingencies
10. The Employee Handbook also enhances the employer’s image in the labour market and
helps attracting talents with ease

Who should initiate?

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Given the impact that a well-drafted Employee Handbook will create among the stake-holders,
it is always recommended that the highest decision-making executive of the organisation shall
initiate the process of putting it in motion, and play an active role in supervising, reviewing,
recommending and ensuring that it is regularly updated; it sufficiently reflects the employer’s
agenda; and it is well-received and serves the objectives optimally. Though dedicated Human
Resources personnel may be assigned with the relevant tasks and responsibilities, the executive-
control over the entire process is a sine-qua-non.

Does the Handbook serve as a Personnel Manual?

It should be remembered that the Employee Handbook is not always exhaustive and
comprehensive. It is also not meant to replace a Personnel Manual that contains more
comprehensive and exhaustive information and procedures pertaining to different aspects of
employment.

Generally, the Employee Handbook is, at best, a guiding document that may refer to more
exhaustive sources for detailed information on any particular issue or subject dealt with. There is
no hard and fast rule that imposes documentation of an exhaustive and comprehensive all-
purpose Employee Handbook that handles all aspects of Human Resources management in the
organisation.

Recommended Contents
The following contents are recommended for incorporation into the Employee Handbook in
order to achieve the objectives outlined. Care must be taken to ensure that none of the
provisions contained in the Handbook is in contravention of any local or federal statute.

Preamble
It is a good practice to incorporate in the Employee Handbook a suitable Preamble in the
nature of a disclaimer intended to avoid misinterpretations. The Preamble should be descriptive
in nature, emphasizing that the Employee Handbook is intended to provide a summary of the
current employment policies, procedures and practice followed in the organisation for
information, guidance and reference purposes.

Since the Employee Handbook may not contain certain terms, procedures or other aspects
specific to the nature of any particular job or category of jobs, it is always advisable to make it
clear in the Preamble that in the event of any provision contained in the Employee Handbook is
not in conformity with or is contrary to anything contained in the individual contract of
employment or a more detailed Personnel Manual or any internal Memorandum circulated
among the employees amending any existing provision, the provisions contained in such contract
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of employment, Personnel Manual or Memorandum respectively shall prevail to the limited
extent of such variance.

The Preamble may also express the privilege vested in the employer to amend any provision
contained in the Handbook including discontinuation of any benefits, policies, procedures or
other terms and conditions of service as may be necessitated from time-to-time; and also assure
that all efforts may be made to notify the employee concerned in such cases, either individually
or collectively, by means of appropriate communication channels including internal
Memorandum or publication in the Intranet website of the organisation.

In order to ensure consistency and credibility to the Employee Handbook, the organisation shall
have proper procedure in place to incorporate these amendments in the Handbook from time-
to-time.

Table of Contents

A good Handbook will contain a Table of Contents (TOC) facilitating the employees to easily
browse the appropriate provisions that they are looking for. The TOC is recommended to be as
simple and clear as possible with page numbers furnished even for sub-titles for easy location
within the Handbook.

Foreword

The Handbook being a document intended for distribution among the employees including new
recruits, a Foreword from the Chief Executive Officer will add value to the document apart from
making it appear more credible and authenticated.

The Foreword may begin with welcoming the employee into the organisation. It may contain a
summary about the organisation in general with specific references to the local office and its
operations. It is a good practice to convey the Mission, Vision and Core Value Statements and
Operating principles of the organisation through the Handbook. It may also elucidate on the
prospects for career growth within the organisation and formally introduce the employee to the
Human Resources department of the organisation.

Induction and Training

If the organisation has any specific orientation or induction and training programme, furnish
details thereof specifying the objectives of each such session. It is also a good practice to
stipulate a time-frame within which the programme is expected to be completed by new
employees.
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The Human Resources department should be assigned with the task of continually monitoring
and updating the orientation or induction and training programme contents, depending on the
functional and job responsibilities of the employees. A good homework with ideally a check-list
to be maintained by the HR department will be helpful.

Apart from the induction training, it is always advisable to schedule ongoing training sessions
periodically covering all categories of employees to keep them updated with new technologies
and skills. To encourage participation, it is a good idea to make it part of the Appraisal process.
Information on such ongoing training sessions, if offered, may also be furnished in the Handbook
with details of subjects dealt with, periodicity, participation criteria, etc.

General conditions of service

The Handbook may also contain information about general conditions of service of the
employees and information on topics of interest to employees with particular reference to the
following:-

Work Permit

If statutory requirements stipulate employers to seek Work Permits for certain categories of
employees, it shall be appropriate to provide information about the procedure to be followed to
obtain such permits and information or documentation expected from the employee in
connection therewith (Examples: Photographs, copy of Passport, etc.). Usually, the Human
Resources department maintains validity details of such work permits and alert employees
sufficiently in advance for renewal thereof. However, it is a good idea to shift the onus on the
employees by asking them to notify their Human Resources or Facilities Manager for renewal of
their work permit at least one month in advance of its expiry date.

Probation

The period of probation, if any, applicable to new employees joining the organisation may be
furnished in the Handbook with procedure and consequences of the evaluating process during
this period.

This section should also cover information on issues likely to raise doubts in their minds such as
eligibility for leave during the period of probation.

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Working Hours

The regular working hours of the organisation may be stipulated with clarity on specific period, if
any, allowed for tea or lunch recess. If there are regular changes in working hours during any
specific period of time (example, during the holy month of Ramadan in the Middle East region or
Islamic countries), details thereof may also be specified. Similarly, if specific categories of
employees are exempted from the usual working hours or are expected to follow different
working hours, mention about such deviations may also be made.

It is not unusual to add a proviso asserting the employer’s right to require employees to put in
additional hours of work to meet unforeseen deadlines or emergencies. However, it is advisable
to mention about the employer’s obligation as well, to abide by the industry practice or statutory
requirement, where applicable (Example: Payment for overtime work).

A trend has emerged in the modern corporate world whereby employees are permitted to work
from home, depending on the nature of the work and factors concerning feasibility of such
option. If applicable, a mention thereabout is recommended.

Workplace Resources

Though it is a general practice followed by organisations with dedicated HR departments to

provide for Furniture, Stationery, Computer and peripherals to new recruits either at the time of
their entry or within a reasonable time thereafter, some companies may expect employees to
furnish prescribed requisition forms for being provided with these resources. It is advisable to
mention about such requirements, if any, in the Handbook itself, preferably with the prescribed
form, if applicable, as annexure thereto.

The Handbook may also provide for handing over or requisitioning work resources and the
procedure to be followed in the event of internal transfers within the organisation.

Workplace resources may include provision of Stationery, Furniture, Computer and

Accessories, Landline and/or Mobile Phone instrument, Punch or Proximity Cards for Office
entry or exit, allotment of parking space for private vehicles, logon credentials for accessing the
organisation’s local area network, access to the organisation’s Intranet, Email system, etc.

Recovery and Reimbursements

Some organisations allow their employees to use personal devices such as Mobile Phones
owned by the organisations themselves, for personal use and recover proportionate usage
charges from these employees. Similarly, charges for international private calls made from the
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landline phones are also recovered.

On the other hand, official expenses incurred by employees from their personal devices such as
telephone rental and call charges, internet rental and usage charges, etc., are reimbursed by the
organisation.

The policy of the organisation in respect of the above scenarios and the procedure to be
followed in these cases may be furnished in the Handbook.

Dress Code

Expectation of the organisation as to the dress code to be followed by different categories of

employees during given periods of time may be furnished in the Handbook. Some organisations
may insist certain dress code to be followed only on certain situations such as use of full suit and
tie while attending Client meetings, etc. There may also be exemptions from dress code during
certain days of the week. In some cases, women may not be expected to follow any specific
dress code whereas men may be required to.

Depending on the policy of the organisation in this regard, the Employee Handbook may
describe the expectations on dress code and also attendant penal consequences, if any, when
the code is violated.

Moral or Ethical Standard

Several multinational organisations respect certain moral or ethical standard as a matter of

policy. The standard may include ban on smoking in designated areas of work, ban on use of
mobile phones at workplace, observing restraint on certain activities during the holy month of
Ramadan in Islamic countries, etc. Organisations expecting employees to follow such standard,
if any, are advised to incorporate such expectations in the Employee Handbook.

Recreation and Entertainment

There are organisations that allow their employees to relax or even take a quick nap during
working hours apart from allowing employees to play indoor games, facilitate women workers
with play area for their children during working hours, etc. Some organisations facilitate the
playing of channel music all the time that they believe, will contribute to employee productivity.
The Handbook may furnish such details, where applicable.

Duty to notify personal information changes

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Personal details of employees such as telephone or mobile phone numbers, email address,
residential address, marital status, etc., are subject to changes from time-to-time and the
organisation needs to have updated information at all times. As such, the Handbook may advise
employees to notify the designated Officer about changes to their personal information as soon
as practicable.

Service Requests

Procedure to be followed by employees for new services or restoration of services such as

facility for international call dialling or roaming on telephone, provision of devices like
GPS or Blackberry, restoration of data from backup, replacement of defective Computer
or peripherals, etc., may also be furnished in the Handbook with prescribed forms, if any, to be
used for such requests as annexure thereto.

Pay and Allowances

It is a good practice to furnish the general procedure for disbursement of pay and allowances
and such other relevant information as a separate chapter in the Employee Handbook. Ideally,
details pertaining to pay and allowances may be furnished in different paragraphs dealing with
each of the components for a good order, some of which are furnished below.

Disbursement of Pay

While the Handbook may refer to the individual employee’s contract of employment for actual
details of pay, the common features and other aspects of pay may be furnished as a matter of
general information. For example, the general rules of pay disbursement like the regular date of
payment, what happens if the regular date happens to be a public holiday, whether the employee
is allowed to draw pay in cash or is the pay disbursed by bank transfer, basis of calculating pay
for employees joining the organisation otherwise than at the beginning of the month, method of
computing compensation for overtime work, etc., may be furnished in the Handbook.

Allowances

Since different organisations have their own internal rules and regulations as to payment of
allowances, it is a good practice to furnish an overview of all types of allowances applicable to
different categories of employees in the Handbook. Furnishing a brief description of different
allowances such as Dearness Allowance, House Rent Allowance, Hill Area Allowance, Night
Shift Allowance, Overtime Allowance, Officiating Allowance, Special Area Allowance, etc., will
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help employees to understand both the concept and computation of these allowances.

Fringe benefits

Compensation to employees in addition to salary is generally termed as Fringe benefits. Some

examples of fringe benefits are paid holidays, retirement plans, life and health insurance plans,
subsidized cafeterias, company cars, stock options, and expense accounts. In many cases, fringe
benefits can add significantly to an employee's total compensation, and are a key ingredient in
attracting and retaining employees. For the most part, fringe benefits are not taxable to the
employee, though they are generally tax-deductible for the employer.
It is a good practice to furnish details of Fringe benefits recognized by the organisation while
making it clear that entitlement to such benefits would be in terms of the individual contract of
employment.

Right of recovery

There may be circumstances leading to disbursement of pay and allowances with inadvertent
errors in computation thereof. For the sake of good order, it is a good idea to clearly mention in
the Handbook that while the organisation shall take every care to ensure accuracy in
computation of pay and allowances, it retains its right to recover excessive payments, if any,
made due to oversight or inadvertent errors in computation upon discovery at a later date.

Deductions

Similar to description of various allowances, it is a good practice to furnish details of possible

deductions from the employees’ pay on account of statutory or other obligations. Examples of
deductions are Taxes such as Income Tax, Profession Tax, and Installments for repayment of
loans or advances, etc.
In countries where statutory rules or regulations mandate issuance of prescribed forms
authenticating the pay or allowances drawn by categories of employees for the purpose of
furnishing Income Tax returns, procedure for obtaining these forms may also be described in the
Handbook.

The Handbook may also describe the procedure for handling situations where there are
statutory restrictions on the limit of deductions from employees’ pay and allowances.

Career Growth
The opportunities available within the organisation for the employee’s career growth may be
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incorporated in the Employee Handbook. This could be an area to tap the potential available in
every employee by offering proper direction and avenues for growth.

Policy on Continuous Professional Development, incentives for newer qualifications attained,

facilities to enhance knowledge and skills such as access to Libraries, Online resources and such
other matters may be described under this section.

If the organisation has developed or adopted any Promotion Policy, the salient features of the
Policy may be furnished.

Attendance and Leave Policies

The organization’s Attendance and Leave Policies may be spelt out in clear terms in the
Employee Handbook as it is one of the topics of interest to employees. It is always
recommended to mention the organization’s holiday-year if it is different from the calendar year.

List of Holidays

Wherever practicable, the public holidays declared by the local Government or local authority
for the appropriate year as applicable for the organisation, may be listed out in the Handbook.

Leave EntitlementThe Handbook may list out the types of leave (or holiday) to which an
individual employee or category of employees is entitled to during a holiday-year with the rules
and regulations in connection therewith. Care should be taken to ensure that none of the
provisions are in contravention with any applicable law in force. The types of leave may include
Casual leave, Standard leave or Earned leave, Sick leave or Medical leave, Maternity or
Paternity leave, Adoption leave, Study leave or Examination leave, Parental leave and Special
leave. It may also be advisable to mention about circumstances where authorized absence does
not fall under any of these types of leave in which case it may be treated as unpaid leave. Limits,
if applicable for any type of leave during a holiday-year, may also find place in the Handbook.

Unauthorized absence

The definition and consequences of unauthorized absence may be spelt out in clear terms.
Circumstances where absence may be deemed to be unauthorized may also be explained.

Employee Safety

In many countries, it is mandatory to bring to the attention of all or certain categories of

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employees about certain safety measures and procedures to be adopted while at work. Some
organisations, even in the absence of any such statutory requirements, issue advisories to
employees on safety precautions to be taken while at work. The organisation may also have its
own Business Resiliency-related procedures to be followed by all or certain categories of
employees.

The Handbook may also describe the steps that each and every employee is required to take in
the event of emergency situations such as fire, power outage and accidental injury of a colleague.
It is a good idea to describe common first aid procedure and furnish information about the
availability and contents of one or more First Aid boxes in the premises of the organisation.The
Employee Handbook is an ideal means of communication about matters related to employee
safety and relevant procedures.

Conduct, Disciplinary and Appeal Rules

The organization’s rules of conduct and procedures for disciplinary action and appeals may also
find place in the Employee Handbook.

If the organisation promotes a conciliatory approach and encourages a mechanism to redress the
grievances of employees, procedure thereof may also be furnished.

Some organisations encourage and expect employees to alert the management in case of any
wrongdoing within the organisation comes to their notice. In order to ward off the consequential
threat to employees, the organisation may follow certain procedures to deal with such situations
aimed at protecting the disclosing person by maintaining confidentiality. This may also find place
in the Employee Handbook. The Handbook may also contain procedure for dealing with
allegations of workplace harassment or bullying.

The duties and responsibilities of employees in the context of the organization’s policies on Data
Protection, Email and Internet Usage and Transfer Policy including relocation within the same
organisation or within the group or organisations may also find place in the Handbook.

Emergency Contacts

It is also recommended to furnish the contact information (such as landline or mobile numbers)
of personnel to be contacted after normal office hours for use in emergencies.
Version History

It is a good practice to incorporate the version details and history of the Handbook at a
conspicuous place in the Handbook for the purpose of reference and records.

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