Tightrope: Employment manual is a necessity, not a formality

— -- Hi, Gladys, For the past five years I have owned an exercise studio that I consider to be successful, and I make a good living from the business. However, I sometimes fall short in handling employee situations. I usually don't address issues related to vacation, time off or workman's comp until something happens to bring it up. My wife says that this is not the way to run a business and that I should have a written employee policy manual. That seems like a lot of formality that I don't think a small company like mine needs. What do you think? —Marty

All too often someone will start a business and think that because it's a small operation it doesn't need to operate as a structured business. Nothing could be further from the truth. And, if you are hiring people to work for you, both you and your employees will need something written to keep you both on the right track.

You said, "It seems like a lot of formality." Perhaps it will become more palatable to you if you change how you see a written polices manual. Instead of thinking of it as a formal intrusion, think of it as a way of expressing your visions and goals for your operation to your employees. Also think of it as a tool that helps to keep you on track to realize your visions and goals.

You can find books and templates to guide you in developing an employment policies manual. Here are a few things that come to mind that will get you off to a good start.

Terminating an employee can be a tough situation and it is important to know what the law has to say about this.

Most employment in the United States is considered "at-will." This means that either party is free to end the employment with or without notice, as long as there are no binding contracts. Double check this with a lawyer and make sure that you and your staff fall under the "at-will" rule.

Workers compensation and unemployment benefits should be written out in detail so that you are both clear on the pros and cons of both.