3 Reasons Why Your Company Policies Must be in Writing - Free Enterprise
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3 Reasons Why Your Company Policies Must be in Writing

Guest post by Jennifer K. Halford, Esq.

I recently had a conversation with a very disgruntled employee. She was upset that her employer had reprimanded her for violating a company policy. The problem was that the "policy" did not officially exist...at least not in written form.

It is important that business owners create certain business policies and practices. Good policies help your employees perform to your expected standards. Good policies can also ensure your employees are not acting in a manner that will get you sued.

Spending your time and money to create company policies many not be at the top of your to-do list. However, your business is at risk if your policies are not in written form.

Here 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.

Avoid this problem. Make your expectations clear and in writing. Provide a copy of your policies to each employee. Have your employees sign a document stating that they received and read the policies. Place the statement in your employees' files. 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. Talk to your attorney to make sure important business policies are in writing and properly enforced.

Jennifer K. Halford is an attorney whose practice focuses on business law and estate planning. She is also a professor at California State University, Chico, where she teaches Entrepreneurial Law.