Why Employee Handbooks are Essential For Your Organization

employee handbook

An employee handbook can serve as a key way to welcome employees to your company. Imagine, if you will, that every new hire at your company was welcomed with a celebration. Some might welcome employees with a bunch of swag on their first day, others may even give them a bunch of flowers or an invite out to lunch on the boss.

That said, a proper welcome is just as much about helping them figure out the rules as it is celebrating their arrival. These rules, guidelines, or ‘the way we do things around here’ is incredibly helpful. That is why having a clear, up-to-date employee handbook that sets out this information can go a long way towards creating and fostering the right culture.

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What Is an Employee Handbook?

Whether you call it an employee handbook, a staff handbook, a policy and procedure manual, an employee manual, or even a culture code, this is a very important HR document. An employee handbook is a single document (or location – if you choose to create an online version, like Trello did using their signature ‘Boards’) that sets up expectations of employment. Employee handbooks typically cover company policies, provide insights about the workplace culture, and list expectations surrounding employee behavior and performance.

Do You Really Need an Employee Handbook?

The short answer, yes. An employee handbook is not only beneficial to your corporate culture, but it fulfills a legal purpose, too. It documents information about company rules, disciplinary procedures, and even employment law-related subjects and regulations. Think of it like this: if you could transform your most knowledgeable HR person and manager into a document, it would be your employee handbook.

Keep in mind, though, that some companies have made their handbooks pretty cool. Zappos, for instance, uses a comic book layout as this cool video explains and Disqus (where they proudly admit that they’re all geeks at heart) splits their handbook into a culture book and a formal, legal document. While these are great ideas in their own right, others prefer to take a more traditional approach.

The Benefits of an Employee Handbook for Your Company

Start off on the right foot by sharing your company culture. Take HubSpot, for instance, which has its own 128-page Slideshare Culture Code. This is one of the major reasons to have a staff handbook, as it serves as a great introduction to the ‘why’ and the ‘how’ powering your work.

That in mind, the benefits of having an employee handbook also include:

  • Setting realistic expectations for staff members.
  • Sharing information on benefits (from health insurance to paid leave, any special features like time people can take off to help charities, or whatever special perks your company believes in).
  • Explaining what employees can expect of their management and leadership teams and what behaviors are encouraged and rewarded.
  • Protecting your company.

Whether we like it or not, sometimes things go wrong in the relationship between employees and employers and the rules are there to protect both parties. An employee handbook is important and serious – no matter how pretty it is or how fun it is to engage with – and it includes information about your duty of care to your employees and what you expect of them in return. It helps clarify expectations and reduce misunderstandings at work. It can also help protect your company if an employee tries to make a legal claim against you.

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What Should Be Included in an Employee/Staff Handbook?

What are the working times that you expect staff to adhere to – even if they’re flexible? Are there rewards for recruiting new employees? How do you handle harassment and violence? Do you have a mental health policy? What about that data (your company’s and your customers’ data) that your employees interact with – how do they need to protect that? These are the kinds of questions that a robust staff handbook should include.

When writing an employee handbook you should always try to cover these basic areas:

Employment essentials

Be sure to include information about employee contracts, recruiting staff (processes and procedures), attendance rules, and any equal opportunity policies or procedures.

Policies about the workplace

This should cover government legislation like health and safety and include information about confidentiality, data protection and your company’s approach to harassment or violence in the workplace.

Code of conduct

In the ‘code of conduct’ section be sure to include information about dress codes (if you have them), the use of devices (e.g. can employees use their own mobile phones, or will they be provided with one), any potential conflicts of interest with other companies and how to deal with these, any rules about visitors on site (especially if you have confidential info in the workplace) and sensitive issues like whether office romances are permitted, or need to be disclosed.

Payment and employee development

When, where, how often, and how much will employees be paid? How often will performance reviews take place? And are there any formal career development initiatives in place? These are the kinds of questions that a section on compensation and development in your staff handbook should include answers to.


Some companies have a bunch of great employee benefits that employees don’t think about or take advantage of. You might offer flexible benefits, where employees can make their own choices within a framework of benefits, for example. Some companies have benefits where employees can actually get bigger employer contributions if they put more of their own money in (like pensions).

Make sure that your employee handbook covers all the benefits you give employees – including health insurance, working from home, how to claim expenses, any other benefits like company cars, parking or interest-free loans for buying a bicycle, to how to look after company-issued equipment like phones or laptops. In this section you can also include other ‘perks’ like office nap pods, monthly breakfasts, employee volunteer teams or discounts at clubs or facilities.

Holidays and time off

Everyone deserves a holiday: How much paid time off they get is up to you. Your employee handbook should cover the amount of annual leave they receive and what happens in the case of unpaid time off – for short or long-term sick leave, maternity leave, paternity or adoption leave. Some companies also offer paid time off for charity initiatives, for example, a half-day off each quarter for employees to do team-based outreach programs like building homes, cleaning up rubbish or volunteering. Your employee handbook should cover this.

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Ending employment

An employee handbook must also cover what happens when it’s time for an employee to leave. Important elements to include here are any disciplinary procedures or policies, notice periods, how and when to terminate employment – both from the employee’s perspective and the employer’s perspective, and what your company policy is about providing references for previous employees.

There are other elements you can also include

An employee handbook is also a place where you can show a bit of personality or work culture, if you choose. You could make the document welcoming and fun, or formal and practical. You could include your mission and vision statement (if you have one) and information about the background and culture of your company.

You could include stories about previous or current successful and happy employees, you could put diagrams in (like this company, Valve, did in a very interesting interpretation of an employee handbook). You could make it colourful and bright, or simple and to-the-point. Whatever you do, make it as painless as possible for employees to read and understand.


Regardless of how you choose to put your handbook together – as photographs of a beautiful book like Facebook did, or a single web page that employees need to sign digitally, like AirMason did for Sterling Mining Co – it is very, very important than an employee reads it and signs to confirm that they have read it. It’s also worth storing this signature and document in a single location that’s easy to find, like a digital employee file.

After all, an employee handbook is the physical embodiment of all your rules and regulations in one single place. And if you don’t have one yet, maybe now’s the time to create one? Here’s a helpful employee handbook template to get you started.

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