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Spell It Out in an Employee Handbook

Oct 31, 2011

Employee handbooks encourage employers to face important decisions about employee policies rather than continuing to postpone them. Put your policies in writing to clarify and protect. 

ChuckSchwartau photoBy Chuck Schwartau, University of Minnesota Extension
One of the most common topics for calls and consultations in recent months has been employee handbooks. Employers are experiencing situations with their employees that need some common-sense solutions but also solutions that can be consistent for other employees and situations. If every problem is handled individually, you open the door for inconsistency, employee dissatisfaction and perhaps even allegations of discrimination. 
Right along with those questions are usually the ones asking if an employee can be put on salary rather than an hourly wage. The employer’s thought process is usually looking for a way to add more flexibility, lessen record-keeping (time sheets) and avoid having to pay overtime, etc. In short, the employer wants to minimize his or her own work necessary to being an employer. Unfortunately, nothing comes for free.
While each employment method has its pluses and minuses, you need to be sure you understand what you get with each and what you give up, especially if you don’t have a good employee policy manual in place. 
Here is an example from a recent call. An employee didn’t show up for his shift and didn’t notify the employer in advance that he wouldn’t be there. Besides scrambling to get that shift covered, what do you do? If the employee is an hourly one, you have the leverage of not paying him or her for time he or she didn’t work. If you have to pay someone else overtime, or call back another employee to cover you, at least have something in the checkbook with which you can pay them. Having employees on an hourly basis does create a bit more work preparing payroll, and you have to consider how you manage the workforce and overtime, but it can be pretty clearly defined.
What do you do if the employee is salaried and doesn’t show up? Can you simply deduct from their bi-weekly or monthly pay the equivalent of one shift’s pay? While it sounds good, it might be a problem if your policy manual doesn’t include a process of warnings and/or penalties for failure to show up for work. The common first response is,”Deduct from the pay check,” but it might not stand up if the employee challenges you and they had not been given any indication of consequences for their action. 
This situation could have been relatively easy to answer, and maybe even have been prevented, if there was a clear policy manual that spells out the consequences of missing a shift without an excused absence. If employees know there is a financial consequence, it becomes clear to them what happens to their paycheck when they don’t show up and they may think twice about missing in the first place. It is also easy then for the employer to remind the employee of the policy and the consequences of the action. Just be sure every employee has a copy of the policies and indicates they understand them.
Tom Maloney of Cornell University suggests several reasons for having an employee handbook. Two of those reasons are:
·         Help assure that all employees are treated fairly and consistently.
·         Encourage employers to face important decisions about employee policies rather than continuing to postpone them.
Those last two reasons can prevent a lot of employee/employer relationship problems on farms. It takes some time to develop a good employee policy manual, but it can be time that yields great dividends in a smoother system. Most employees are willing to follow good procedures if they clearly know what they are.
For further information about the value of employee policy manuals and a guide that can help you develop a manual for your farm, take a look at theUniversity of Minnesota Extension Dairy webpage. Under the “Employees” link, scroll down to “managing,” where you will find a more detailed article, “The Value of Employee Handbooks” and an “Employee Handbook Development Guide” that should help you determine what subjects should be addressed in your handbook. 
An employee handbook is never really done as there are frequently new situations, rules and perhaps even regulations that need to be brought to the attention of all employees. This framework will get you started in the right direction, though.
Back to the question of the absent employee. Think about it a while yourself and maybe even bring it up as a “What should we do if. . .?” question for discussion at an employee meeting. You might be surprised how they answer. It could be a good start for your policy handbook. 
Chuck Schwartau has been with the University of Minnesota Extension Service for 31 years. As part of the Extension Dairy Team, he focuses on workforce development and management, dairy business organization and risk management. Contact him at cschwart@umn.edu or (507) 536-6301.
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