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Like a lot of other start-ups, you opened your doors with only a few key people in place — and they were relatives or friends you’ve known for years. Now, business is booming, and your little company is hiring.

It’s time to get an employee handbook together. Employee handbooks are an essential part of the modern business environment for the following reasons:

  1. They help define your company culture. A positive company culture that’s clearly supportive of its employees helps foster a sense of loyalty. It can also help weed out “bad apples” who aren’t accepting of diversity or who simply don’t know how to behave in a business setting.
  2. They can define expectations for success. You risk a lot when your employees don’t know what’s expected of them. New employees may fail to understand what it takes to be good at their jobs and performance reviews could seem arbitrary or unfair. They also tell employees critical “basics,” like the company dress code and rules regarding the sharing of digital information.
  3. They explain what employees can expect from management. Your handbook should aim to eliminate confusion about things like sick and vacation leave policies, complaint processes and the process that will be used when there’s a problem with an employee’s work. That helps provide security for your employees and provides guidance that you can use to make sure that you’re always being consistent with the rules.
  4. They provide important notices. There may be numerous official notices that you’re required to give your employees, such as their rights under the Family Medical Leave Act (FMLA) and workers’ compensation.

A good employee handbook doesn’t just help your employees — it also helps your business avoid lawsuits. By putting the company’s rules in writing (and then following them), it’s far easier to defend against wrongful termination claims and more in court.