When we worked in Big Companies - in Corporate America - the HR Department always made sure we had a copy of The Employee Handbook.

It's the kind of thing that most people don't want to read, at least not closely, and rarely when they start work with the new company.

My experience has been that the only time someone reads The Handbook closely is when they are in trouble with the company, and want to find out what bad things could happen to them.

You can bet The Handbook is read closely by the supervisors, the HR department, and the Legal department.  One other type of person might read The Handbook - the attorney retained by a terminated employee.

The attorney is reading The Handbook to see if the company followed its own rules in forcing the termination.  The attorney is hoping for clear evidence that the employer did not follow the rules and therefore basis for a wrongful termination suit exists.

And the attorney is really, really hoping for indications that a pattern of abuse exists, raising the potential for a class action lawsuit, which is where the Big Bucks really are.

The Employee Handbook is intended to be a clear and open communication between the Company and its employees regarding the rights and responsibilities of both parties in the employment relationship.

In the best sense, the Handbook sets forth comprehensive and consistent rules that govern the interactions of the employees and the employer. 

A well-written Handbook, reviewed and updated periodically, and communicated to all parties, will do just that.  The policies set forth in the Handbook will handle most situations.

In a practical sense, conflicts arise.  The Handbook is then consulted to answer questions like, Can they really do that to me? and, How do I go about doing this to them?

The best way for a company to lose a lot of money is to not follow its own rulesto violate the procedures in its own Handbook.  Not only will the company lose the lawsuit, it is exposed to the community and to its own employees as an organization that does not mean what it says.

I know of one situation where two employees were terminated for just cause, but the Handbook procedures were not followed.  The employees were subsequently reinstated by Court action, and apparently feel that they are now immune from supervisory interference.

Their non-performance and their negative attitude is legendary throughout the Company, the entire Companys performance is compromised, but Management was afraid to risk another lawsuit.

I know all this, because I was offered the job of managing their Department.  I declined the offer

I would argue that in todays world, small companies need an Employee Handbook just as much as The Big Companies.

Think about it.  In small companies, were much less formal, and we cannot afford the Its not in my Job Description attitude.  We tend to be more casual about keeping time sheets and overtime records, as well as logs for vacation, sick, holiday, and Paid-Time Off.

We often don't have formal Employee Evaluation Programs.  We may not maintain consistent documentation of employment applications, nor do we secure the necessary permissions from applicants to perform employment, criminal, and drug screening checks.

Even so, most small businesses get along just fine without doing all this.

But a problem will surface sooner or later, and it could hurt.  Badly.  It could be as employee who voluntarily resigned, but who wants to complain about non-payment of accrued Paid Time Off.  It could be an employee who deserved to be fired, but was fired in such a way that s/he was reinstated.

Here are some FAQs on Employee Handbooks:

When should a small business consider implementing an Employee Handbook?  Start thinking about it when you have more than three people working in the business.  And get The Handbook in place before you get 5 people working in the business.

Where do you get these Handbooks?  Any number of small business providers, such as the Small Business Development Centers, the Entrepreneurial Resource centers, various web-based providers, and some of the Payroll Service companies can all provide standard Handbooks.