Accounting & Bookkeeping

Why an Employee Handbook is Necessary

Why an Employee Handbook is Necessary

Introduction to Organization

The employee handbook contains a detailed introduction to the organization. This may include the history of the organization, how it came into being, what is its purpose, and how it is being operated. It may also contain some disclaimers such as the employee handbook does not create a relationship between an employer and employee. It might even say that the manual is subject to change under any circumstances. and also it is not a final exhaustive guide to any issues that might arise under the course of the employment.


According to Wikipedia, A mission statement is a short statement of why an organization exists, what its overall goal is, identifying the purpose of its operations: what kind of product or service it provides, its primary customers or market, and its geographical region of operation.

The ‘C’ of the company makes an employee understand the mission of the company. The employee can assess if the organization is working towards achieving its purpose or not. An employee would not like to work for an organization that is deviating from its mission statement.


Policies of the company about the employees. This is an essential part of the handbook for the employee as it states the policies which apply in the day-to-day workings of the organization to the employee.
All employees of the company have to follow these policies, even the CEO and the Managing Director.
Policies in an employee handbook should usually contain written policies of the company about equal employment opportunities, your employment relationship with the company, recruitment, and hiring, specific policies relating to the employees viz, exempt employees, non-exempt employees, full-time employees, part-time employees, and temporary employees.

It may also contain policies forming part of your compensation. Compensation can include payroll practices, salary deductions and withholding taxes, insurance, and other deductions forming part of your salary. Also detailed are the insurance policies that cover you in such as Medical insurance, employee, and employer contributions to pension funds according to the legal laws and life Insurance, if any. The insurance cover of employees also covers spouse, parents, and dependent family members. It is an added benefit.

They also mention holidays and other leaves that form part of your employment terms in the employee handbook. Employers nowadays offer many kinds of leaves, such as religious festival leaves, holiday leaves, compulsory vacation, sick leave, casual leaves, maternal leaves, paternal leaves, and medical leaves.

Many employers offer work from home facilities to selected employees for them to work efficiently. All these are detailed down in the handbook when an employee can avail of these facilities, in what conditions, etc.


Discipline forms an essential part of an organization’s culture. Its issues can be necessary, as well as complicated. It can start from the dress code of an employee to keep all employees safe in the organization. It gives the major impetus today to employee harassment. They put vigorous punishments in place to discourage sexual or mental harassment of an employee. It also mentions when the company can dismiss an employee from employment on disciplinary grounds. Every employee should maintain strict confidentiality of all sensitive information and data of the organization and its clients. They put various grievances committees in place by the employer to resolve complaints relating to harassment or other issues. It also includes whistleblower management in the discipline.