How to Create an Effective Employee Handbook

This employee handbook guide will teach you how to develop a handbook for your team. We'll also go over why every company needs one to be competitive.

Written by: David Oragui

Published: March 23 2020

Employee Handbook Guide

Looking for a guide to help you create an effective employee handbook? Then keep reading because this article will show you how to do just that.

If you’ve been following Helpjuice’s blog for a while now, you already know how important it is to standardize as many of your organization’s processes as possible.

It just makes sense:

If your goal is to allow your company to run like a finely-tuned machine, you need to define exactly how your various teams approach and complete the tasks they’re responsible for.

In addition to standardizing your processes, it’s also crucial that you lay out exactly what’s expected of your employees in terms of their conduct and their approach to working within your organization.

This is where a comprehensive employee handbook comes into play.

What is an Employee Handbook?

An employee handbook is a document created for employees that provides essential information about the company and the organization’s terms of employment.

Typically, your handbook will cover the following:

  • General Employment Information: Your handbook should discuss the organization’s policies, rules, and other procedural directions and instructions.
  • Cultural Information: Employee handbooks typically include a section detailing the organization’s mission and vision statements, and may also include information about the company’s personnel (e.g., biographies, etc.).
  • Case-Specific Information: Your handbook should include legal and regulatory information as necessary. In certain cases, this may mean providing specific directives for employees to follow before, during, or after certain events or occurrences.

We’ll take a closer look at everything that can (and should) be included in your employee handbook a bit later on.

For now, just know that a handbook is meant to be an end-to-end resource that allows your employees to gain a true understanding of what it means to belong to your organization.

What is the Purpose of an Employee Handbook?

Overall, the main purpose of your handbook is to be the go-to resource for employees looking to better understand their role(s) within their organization.

In being this comprehensive resource, your handbook serves two key purposes:

  1. First, it explains to your employees what’s expected of them in terms of their workplace conduct and their approach to the job. This goes back to standardizing your processes: By making your expectations clear from the get-go, you’ll make it that much easier for your team to live up to these expectations as you’d hoped.
  2. Your employee handbook should also set your employee’s expectations in terms of what it will be like to work within your organization. Again, rather than leaving this information “up in the air,” your handbook will clearly spell it all out—allowing your employees and your managerial staff to remain on the same page at all times.

Writing our handbook has enabled us to take stock of exactly what we currently do and what we expect from our employees.” - Mark Webster, Co-Founder of Authority Hacker

What are the Benefits of Creating an Employee Handbook?

To be sure, creating an employment handbook is by no means a sunken cost.

Yes, it may be time- and resource-consuming to do so—but the benefits of keeping your employees fully-informed far outweigh these upfront costs.

Minimize and Mitigate Disputes

For one thing, a comprehensive employee handbook can minimize employee disputes regarding your company’s policies and procedures. 

Since your employees will be able to refer to a standardized document whenever deemed necessary, they’ll be less likely to escalate disputes—and more likely to come to a solution on their own.

(On the other hand, organizations without a documented handbook in place will likely face a much larger number of disputes and incidents. 

Unfortunately, such disputes are often a massive waste of working hours and resources—to the tune of $359B annually in the US alone).

Since your managers and higher-level staff won’t have to step in to resolve conflict nearly as often, they’ll also have much more time to focus on the myriad other tasks they’re responsible for. 

Moreover, when managers do have to step in, they’ll be better equipped to deal with the situation at hand—and to find a satisfactory resolution for all involved parties.

Streamline Employee Onboarding

Having a handbook can also drastically improve your employee onboarding process. 

In fact, a report by BambooHR shows that 28% of HR professionals believe an employee handbook is the most critical aspect of their overall onboarding experience.

An infographic showing how much HR departments waste on ineffective employee onboarding


Note: While proper employee onboarding involves much more than just doling out your handbook, the handbook will act as a foundation and a guide for your new hires as they acclimate themselves with your organization.

As Joey Price, CEO of Jumpstart:HR explains, "An employee handbook that's easily accessible provides a systematic way to address a new employee's frequently asked questions on pay, leave policies, and more. Not only does this help with the onboarding process, but it also helps with improved productivity for your organization as a whole since supervisors won't have to spend time answering the same questions over and over each time a new employee is brought in."

Maintain Regulatory and Legal Compliance

Your employee handbook will also increase your team’s ability to stay in compliance with the various laws and regulations that apply to your business. 

As Anne P. Mitchell, Attorney at Law as well as Dean of Cyberlaw & Cybersecurity at Lincoln Law School explains in regard to creating a handbook which lays out rules/policies that need to be followed: "By making clear those policies, in writing, it puts the business on more solid ground in terms of taking actions with a given employee when they *violate* those policies, as the business can point to that handbook (which of course they have had the employee confirm, in writing, that they have read). 

It also puts the business on firmer ground if the employee later sues the business for any action taken over the employee's infraction of that policy (and it also makes it less likely that the employee will sue, because of the strength of that policy having been presented to them, in writing, in the handbook). "

With the cost of non-compliance being more than twice the cost of maintaining compliance, this extra effort can go a long way in terms of keeping sunken costs to a minimum.

(It’s also worth noting that, in many industries, documenting your compliance protocols is actually a requirement of compliance in itself. 

In such cases, you’ll want to go above and beyond the bare minimum compliance requirements when developing your employee handbook.)

Across the board, the message is clear:

Having a documented handbook will always trump not having one, period.

Still, this doesn’t mean that a poorly put-together employee handbook will lead to the benefits we’ve mentioned here…

What to Do Before You Start Creating Your Handbook

While you now have a general idea of what an employee handbook looks like, you don’t want to dive into creating your own documentation just yet.

Define the Scope of Your Handbook

First, you need to define the scope of information your handbook will cover. This means identifying the processes, issues, and other circumstances that you deem important enough to define in specific and certain terms.

(As a simple example, if it’s important that your employees dress in a certain manner, you need to have a clearly-defined dress code documented within your handbook. Otherwise, you simply can’t expect your employees to adhere to the code at all—no matter how many times you remind them verbally or otherwise.)

There are a number of ways to go about solidifying the scope of your handbook:

You can start by doing a little “spying” on your competition. Here, you’ll be observing their operations to identify common practices that have clearly been standardized within the organization in question. 

If you notice that multiple competitors take a similar approach to certain processes or policies, it’s a pretty good sign that you’ll want to create a standardized plan of attack within your own organization—and to include this info within your employee handbook.

You’ll also want to interview your managers and supervisors to identify processes, practices, and approaches they currently have in place that are clearly effective—but have yet to be standardized. 

This means taking a closer look at what works well within your organization—and what processes may need to be improved. In turn, you can standardize operations in these various areas—and document them accordingly within your handbook.

Your ground-level employees are also a valuable source of information here, as well. 

Look to gather input from them in terms of what allows them to be most productive, when conflict and other negative situations tend to arise, and any other aspect of their work they deem important enough to standardize and document.

In the interest of covering as much ground as you possibly can, it’s important to gather feedback from all of your employees from all of your different teams. 

To be sure, each of these entities—from HR and payroll to marketing and sales, and all in-between—will have a different perspective on what it means to be a model employee for your organization. 

Your goal, then, is to find the common ground between each department, allowing you to develop a standardized approach for all of your employees to follow.

On top of all this, you can also refer to the National Labor Relations Board’s suggestions for creating an employee handbook. Here, you’ll find generalized suggestions as to what to include in your handbook—which you can then tailor as needed to fit the specifics of your organization.

Finally, you’ll need to consider your legal obligations as an employer—and ensure your handbook reflects your adherence to these obligations. 

Since you may be required by law to include certain info in your handbook, it’s crucial that you know what these requirements are and follow them to the letter.

Setting Standards for Your Handbook

Creating an employee handbook is not something to be done haphazardly.

Rather, you’ll want to set certain standards for the process—and work to ensure you these standards are met as you go about creating your handbook documentation.

The first step here is to define how you’ll communicate the information to be held within your handbook. This means attending to the language you use within the text, the tone and style of said language, and the overall formatting of the document.

While your approach to these factors will be unique to your organization, there are a few best practices all companies should follow here:

First and foremost, all information should be communicated clearly, concisely, and plainly. This means minimizing jargon, superfluous information, and any other language that may cause the reader to misinterpret the message being communicated.

That said, you also may need to provide rationale for certain policies and/or directives throughout your handbook as necessary. 

Here, the goal is to explain to your team why following the directive is beneficial to them as employees, the organization as a whole, and to the audience you serve.

Now, your employee handbook is a formal document, and should be treated as such. In addition to keeping tone and style uniform throughout, you also need to ensure your handbook’s various sections follow the same format and structure. 

This will not only help minimize confusion on the part of your employees, but it will also make it easier for them to find and digest the exact information they’re looking for as quickly as possible.

Finally, you need to set standards as for how, when, and why you’ll update your handbook over time. 

The document should be updated after a certain period of time as elapsed, or after you’ve made certain changes to your overall processes and operations—whichever comes first.

(In other words, even if you don’t make any specific changes to your policies, you should still revisit your handbook from time to time to ensure accuracy and thoroughness.)

Once you have a standardized creation process in place, you’ll be ready to start putting together your handbook.

What to Include in an Employee Handbook

An infographic showing what to include in an employee handbook

As we’ve said, your employee handbook is meant to provide a comprehensive look at what it means to be a member of your team.

Needless to say, this document will include information regarding a wide spectrum of areas, including:

Introductory Information

Your handbook needs to include an introductory section to set the stage for your readers.

In addition to a table of contents to help with navigation, this introductory section should include:

  • A Welcome Statement: A simple message welcoming the employee to the team and motivating them to read through and learn from the document in order to become a valuable member of the organization.
  • Company Core Values, Vision, and Mission Statements: Here’s where your employees will learn what your organization is “all about,” and what the team is continuously striving to accomplish and strive for.
  • Statement of Purpose: A message solidifying the “why” behind your handbook, allowing your employee to understand the importance of actually reading through and understanding the document as a whole.

At-Will Protections

As applicable, your employee handbook should include information regarding the right for employers to terminate an employee’s contract at any time, for whatever reason.

In signing this documentation, your employees acknowledge that any legal efforts taken upon what they deem to be unfair termination is essentially null and void. 

This can allow you to avoid wasting time and resources on frivolous litigation from disgruntled former employees.

Hiring Processes

With the modern hiring process often being rather complex, it’s vital that your employee handbook spell out all that goes into it.

First, you must include a statement regarding your equal opportunity employment policies. This will explain what factors cannot be used to determine a prospective employee’s eligibility for hiring, or to determine a current employee’s eligibility for promotions, increased compensation, training, or any other aspects of employment.

You’ll also document the actual process your team will go through when filling positions within the organization. 

It’s essential that this process is defined and documented clearly—and that it’s followed at all times for all applicants and new employees. 

From applying and interviewing to pre-employment paperwork and the like, your handbook should cover the hiring process from soup to nuts.

(If said policies aren’t followed when hiring a specific individual, the applicants you’d passed over may potentially be able to claim discrimination within the process.)

This applies to your internal hiring processes, as well: If you don’t have a standard process for collecting and assessing internal applications, you run the same risk of being accused of discrimination by those you may have passed over during the application and interview process.

(Here, the damage to your company may be even worse, as it could cause your current employees to become disheartened or disgruntled upon being passed over for a promotion.)

Another key process to discuss here is your policy regarding employee referrals and recruitment bonuses. 

While this will vary from company to company, it’s essential that your employees know exactly what they stand to gain by helping you recruit additional talent—and how to go about ensuring they receive the proper compensation for doing so.

New Employee Information

The experience of being brought into a new organization can often be a whirlwind for new employees.

With that in mind, your employee handbook should lay out the specifics regarding what new hires should expect as they come aboard.

First, you need to document your policies regarding any introductory or probationary period you have in place for new employees. 

This may refer to any holds on insurance, PTO, vacation time, or any other aspect of employment that new hires aren’t yet eligible for—and will also include information about when these benefits will unlock for them.

This section should also cover your onboarding and orientation processes for new hires. This will set the stage in terms of what your new employees should expect in terms of initial training, etc.—and also in terms of what will be expected of them throughout this introductory period.

Finally, you’ll include in this section for new employees information regarding your employment classifications. 

This means clearly defining what it means to be a full-, part-time, or temporary employee within your organization, as well as whether FLSA laws (regarding minimum wage, overtime, etc.) applies to your employees.

Workplace Parameters

Going along with the previous section, you’ll also want to provide employees with more focused and in-depth info regarding the parameters of their employment.

This information typically includes:

  • Hours of Operation: This refers to your business’ hours of operations, your part- and full-time requirements, and other such info
  • Overtime Laws and Policies: Here, you’ll define what’s considered overtime work for your employees, as well as how they will be compensated for performing OT work
  • Time-Off Policies: This should be a comprehensive list of policies regarding your employee’s time away from work for any possible reason (Such as: Vacation, PTO, sick leave, FMLA leave, bereavement, military service, jury duty, and voting)


Needless to say, your employees will want to know everything there is to know about how they’ll be compensated for their efforts on the job.

That said, your employee handbook will need to cover the following information:

  • Paydays: In addition to defining payment terms (e.g., biweekly, monthly, etc.), you should also include a payment schedule for the current year for your employees to refer to as needed.
  • Deductions: Here, you’ll define what deductions are taken out of your employees’ paychecks (e.g., health insurance, retirement, unemployment, etc.), and how much will be deducted each pay period.
  • Advances: While optional, you may also want to offer advances in pay to employees under specific circumstances. Here’s where you’ll define what these circumstances are, and how the employee can apply for an advance.
  • Garnishments: This section will explain your terms and procedures for court-ordered garnishment of an employee’s paycheck.
  • Expense Reimbursement: This illustrates the process employees will need to go through when applying for reimbursement upon using personal cash for expenses directly related to their job.

Benefits and Perks

Along with compensation information, your employee handbook will also need to document any benefits or perks you offer as a term of employment.

Here, you’ll give a general overview of your benefits package, which may include the following (and more):

  • Retirement contributions
  • Health insurance
  • Worker’s compensation and disability insurance
  • Professional development and employee training

You’ll also use this section to discuss your employees’ privileges regarding use of company property. 

While this will be different from company to company, it often refers to use of the office cafeteria, gym, and/or any other “extras” you provide your employees. 

You also may want to note the scope of your personal usage policies with regard to technology and other equipment.

It’s important to provide separate, more specific documentation regarding your benefits package outside of your employee handbook. 

Basically, this section of the handbook will act as a quick guide for this info—and will then point the employee to documents providing a “nitty-gritty” look at your benefits policies.

Job Performance and Development

Within this section of your employee handbook, you’ll be discussing your processes for assessing your employee’s current performance, and for developing their skills moving forward.

Regarding employee evaluations, you’ll be detailing when and how such assessments will take place (employee evaluation form or face-to-face meeting). 

In turn, your employees will be able to prepare for these evaluations and performance reviews as well as face these engagements with a productive mindset focused on growth.

You may also require that your employees attend training sessions and other professional development events from time to time. 

Here, you’ll be defining the parameters as to how much training is required over a given period of time, as well as how your employees will go about attending and engaging in these sessions.

Workplace Behavior

Here’s where you’ll lay out the standards to which you’ll be holding your employees across the board.

Again, it’s important to cover all the bases here in order to leave zero doubt as to what’s expected from your employees. Moreover, this will also ensure those who don’t adhere to these standards will have no recourse when faced with disciplinary action.

That said, the areas you’ll want to cover here include:

  • Professional Conduct: Provides a general overview of how team members are to act and behave when representing the organization. This sets the stage for your employees to create a positive environment for themselves, their peers, and the people your company does business with.
  • Workplace Health and Safety: Defines measures taken to ensure the safety of your employees, your equipment, and your organization as a whole. This will also explain the processes involved in bringing safety concerns to the attention of others within the company.
  • Employee Privacy: Defines what information is (and is not) considered confidential—whether to the organization or to the general public. It will also determine what actions the employee needs to take to ensure their information remains private. Conversely, this will also define what actions will be considered grounds to nullify the employee’s expectations of privacy.
  • Use of Technology: As alluded to earlier, you need to be crystal clear as to how your equipment, hardware, and software is to be used by your employees. Being too lenient in this regard can unfortunately lead your business to incur major damages in a variety of ways.
  • Use of Drugs or Alcohol: This safety measure aims to guarantee the health of your individual employees, your team as a whole, and your overall organization. It should set a clear and inarguable precedent for sobriety in the workplace—as well as any punishments to be incurred for not adhering to the policy.
  • Conflicts of Interest: Here, you’ll define what constitutes a conflict of interest within your organization—and any disciplinary measures that will ensue upon finding such an occurrence. Basically, this refers to actions taken by an employee that clearly represent a blatant disregard for your organization’s well-being while also leading to personal gains for the employee.

Complaints, Discrimination, and Harassment

Your employee handbook needs to define the policies and procedures for dealing with workplace discrimination and harassment.

On one side, this means explaining to those facing harassment or discrimination what they need to do when reporting the issue. 

This will ensure the proper chain of command is followed at all times, and that the incident is recorded for future reference if need be. 

Overall, creating a clear reporting process ensures your employee’s complaints are heard and taken care of.

On the other side, this section will detail the process of investigating and resolving issues that have been brought to your attention. 

This allows all involved parties the opportunity to plead their case—and ensures the correct measures are taken to resolve the issue or minimize the damage caused. 

And, of course, you’ll also need to make clear the consequences to be faced by anyone found guilty of discrimination or harassment within your organization. 

For one thing, this can act as a deterrent to anyone who may (intentionally or not) be acting in a way that could be considered harassment. 

Secondly, it ensures that those who continue in this manner are punished according to the standards set forth by your organization.

You also may choose to include information regarding informal complaints, as well. An open-door policy, for example, can allow employees to touch base with their supervisor “on the fly” when relatively minor issues arise. 

In turn, the involved parties can quickly nip the problem in the bud before it grows into a major issue that will take much more effort to resolve. 

Moreover, this will allow you to identify issues that may need to be addressed more directly within your handbook.

Ending Employment

All cases of employment will eventually end—voluntarily or not.

In either case, it’s important to define the process of ending employment.

This includes:

  • Resignation Notice Policies, such as how far in advance the employee must notify you of their plan to leave your organization
  • Final Payment Terms for those who have left the organization for any reason
  • Severance Policies, detailing any reimbursement owed to a former employee upon termination
  • Insurance Continuation Policies, typically related to COBRA laws

You also may choose to include documentation regarding non-disclosure agreements, return of company property, and any other policies aimed at maintaining the safety and security of your organization.

Employee Acknowledgement

As you close out your employee handbook, you have two final tasks to take care of.

First, thank your reader for taking the time to digest the information within the handbook in its entirety. 

As you did earlier on in the handbook, you’ll want to reinforce the information provided and the importance of adhering to the policies discussed.

Secondly, include a statement of acknowledgement to be signed by your employees upon receipt of their handbook. 

As we said earlier, this will act as proof that they’ve read and understand the information held within—which can go a long way in terms of mitigating problems sometime down the road.

(Also, be sure to solicit new signatures from your employees whenever you make changes to your handbook. 

Even if you’ve only made changes to certain policies or procedures, this will be a good refresher for your employees as time goes on.)

Distributing Your Handbook

There are two key moments in which you’ll distribute your handbook:

The first instance is self-explanatory: Provision of your employee handbook (along with acknowledgement of such by your new employee) is an important part of the onboarding process that absolutely cannot be overlooked.

As you amend your policies and procedures—and update your handbook accordingly—you want to do more than just send out an updated copy of the handbook. 

In order to showcase the importance of the changes at hand (and of the employee handbook in general), it’s crucial to hold a company-wide meeting in which you’ll distribute physical copies of the handbook and discuss any pertinent information held within.

Finally, you can then upload your handbook into your internal knowledge base or your electronic document management system

This will ensure your team members have open and continued access to your handbook to consult as needed.

Ready to Get Started?

Whether your organization is made up of ten employees or ten thousand, creating an employee handbook is a key step in the process of systematizing and standardizing your operations.

Will it take a decent amount of time, energy, and other resources to make it happen? Of course.

But, as we said earlier, the cost of not creating a handbook can potentially be devastating to your business. 

Without proper policies and procedures in place, even the smallest bump in the road can completely derail your operations and hinder your team’s ability to continue pressing forward.

That said, if you don’t currently have a documented handbook in place, the time to get started is now.

Once you’ve created your handbook, it’s essential that you keep this information top-of-mind for your employees at all times. 

By including a digital version of your employee handbook within your internal knowledge base, you’ll make it easy for your team to refer to the document whenever necessary—and to truly internalize what it means to be a productive member of your organization.

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