An effective employee handbook is a key ingredient in a healthy business. If done properly, your employee handbook can effectively communicate your company's policies and procedures in a coherent and centralized manner. However, if done poorly, your employee handbook can also become a human resource disaster.

Since there is no set format for employee handbooks, you are free to design your handbook however you like. Even so, the best employee handbooks share three essential qualities — content, clarity and consistency.

Content
Deciding what to include in your handbook can be a challenge. On the one hand, you want to include enough information to make the handbook useful. On the other hand, you don't want to include so much information that it straitjackets your company's activities.

Most employee handbooks generally include information about company policies such as work hours, dress codes, safety procedures, vacation time, sick days, paid holidays, and other fringe benefits. Some companies also choose to include information about e-mail and computer usage, phone usage and non-discrimination policies.

Be aware that the material in your employee handbook is fair game in the courts. Many businesses include disclaimers in their employee handbooks to mitigate their legal risk. One of the most common disclaimers is a general disclaimer clearly stating that the handbook is not an employment contract.

Clarity
Your handbook may cover all the bases, but if it is cumbersome and indecipherable it has no value because no one is going to take the time to read it. With that in mind, your goal is to produce a document that is as simple and concise as possible.

Length is not necessarily an indication of quality. Some of the best handbooks are no more than a few pages long, while some really bad ones are nearly book length. Remember: The key is readability. Ask people you trust to review your handbook. If it makes sense to them, then it's a good indication you're on the right track.

Consistency
The basis for most lawsuits is inconsistency, plain and simple. To some degree, your employee handbook can inoculate your business from civil litigation, but only if it demonstrates consistency in its documentation and application.

Avoid including policies and procedures just because they seem like a good idea. In other words, if your employee handbook says that you will perform quarterly performance reviews, then make sure you actually perform those reviews in the timeframe you indicated.

Similarly, the policies and procedures covered in the handbook must apply to all employees. Selective application of policies is an open invitation for litigation by disgruntled employees.

Finally, after you have drafted your handbook, run it by your attorney to make sure you haven't used language that may have unintended consequences. Once it has been approved, distribute it to both new and existing employees. Your attorney may also want your employees to sign a statement confirming they have received a copy of the handbook and understand the policies it contains.

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