For every reason HR best practices say an employee handbook is a practical necessity, there's reasons why some organizations say having one is impractical. Granted, there are pros and cons to every business decision, but the major downside to not having an employee handbook is that you won't have one of the best tools for communicating a uniform message to your employees. Many organizations don't have handbooks because they don't think they have enough employees to warrant developing them, but there are a number of other justifiable reasons why businesses don't have them.
Many small businesses don't have employee handbooks because they don't have someone on staff with the expertise to assemble one. Companies without a dedicated HR department might rely on the office manager or the company president to handle most employment matters, such as hiring, payroll and firing. However, just because someone is responsible for what might seem to be major employment issues doesn't mean they're knowledgeable about HR best practices for developing and implementing workplace policies.
Employee handbooks can be costly. Without staff expertise to develop one, it leaves the option to pay an attorney to write workplace policies, hire an HR consultant or join a professional employer organization. When cash flow is a concern, many businesses won't justify expenses that aren't absolutely required, no matter how relatively small the cost is in whole scheme of things or the return on investment in a handbook. Therefore, they choose to put off the employee-handbook project until they have someone onboard who can write company policies.
Millions of workers prefer being employees of small businesses. They enjoy the casual work atmosphere and the often-cohesive, close-knit relationships that develop in smaller companies. Many small business owners want to preserve that "family" culture by allowing employees to self-direct their workplace behaviors and actions. Creating an employee handbook, for some small business owners, creates an employer-employee relationship that is more formal than they believe is necessary. They look at the downside to creating one, instead of the upshot. An employee handbook can actually validate the working relationship by setting out the company's philosophy and values. A handbook that contains a company mission might state that the company will "Maintain a close, family-like working atmosphere where employees demonstrate mutual respect for friends and co-workers alike." This is simply a statement about the organizational culture that strengthens the company's resolve to preserve its friendly work environment.
Some employers would rather give their supervisors and managers complete autonomy in operating their respective business areas. Because many workplace policies and guidelines are subject to interpretation, the alternative is to not have an employee handbook and allow leadership staff to rely solely on their best judgment in managing their departments. In this case, the justification for not having a handbook is that business owners or presidents say they hired managers to manage, so let them do their jobs.
Business owners see interpretation, or neglecting interpretation, as a challenge that employee handbooks present. They believe that a handbook could diminish leadership staff authority and their willingness to interpret workplace guidelines. As a result, their problem-solving skills and independent judgment atrophy because they suddenly have a handbook with all the answers. Some will follow the policy to the letter without any room for interpretation, never considering the gray areas that often crop up when handling workforce matters.
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