“Creating policies is not — nor should it be — a routine. Processes may need to meet highly specific regulatory requirements, create a corporate ethos, or back up social responsibility statements.”
— Ben Kerschberg, Forbes magazine
Sound policies and procedures are the key to minimizing your risk. As an employer, you may be tempted to express your trust in your employees by articulating philosophies instead of defining policies. After all, you spend a great deal of time and effort searching for like-minded individuals that share your mission.
While we agree that you should incorporate your individual philosophies into your business model, clearly articulated policies and procedures that operate effectively are imperative in order to reduce risk within your organization. We will draft effective polices taking both your business culture and legal compliance into consideration.
According to Jennifer K. Halford, an attorney and entrepreneurial law professor at California State University, Chico, there are three reasons you must put your company policies in writing:
1. To hold employees to expected standards: It is difficult to hold your employees responsible for violating a policy that they did not even know existed. If you do, you have disgruntled employees. If you don't, your business quality diminishes. And provide training about the policies. By taking these actions, you give your employees clear notice of your company policies and the consequences for violating them.
2. To limit your liability: State and federal laws require some employers to have certain polices. For instance, many employers are required to have a sexual harassment prevention policy and an anti-retaliation policy. Talk with your attorney to see which policies you are required to have to avoid liability.
A written policy will also limit your liability by making clear to your employees which actions and behaviors are not tolerated in the workplace. Your policy and training can deter inappropriate behavior that could expose you to a lawsuit.
And if you do get sued, a written policy can serve as evidence of your efforts to stop illegal actions from occurring. This may limit your liability if you provide proof of your written policy and that you enforced it.
3. To avoid having disgruntled employees: Reprimanding an employee for a policy she did not know about affects employee morale, productivity, and loyalty. Plus, you will lose valuable time and expense in hiring and training a new employee if your disgruntled employee quits.
No business owner needs the headache of a disgruntled employee or the expense of a lawsuit.