When you started your small or family business you more than likely developed a business plan. In this plan you laid out your purpose, vision, and strategy in great detail. As your business grew you created contracts, invoices, marketing materials, and other documents, all on paper, so that you had written evidence to signal agreements, to showcase your work, and to provide the necessary leverage should you ever have needed it. All of this was done because you felt if things were not in writing, they didn’t exist.
Importance of Employment Documentation
Putting it all on paper is just as important when dealing with human capital. When it comes to interacting with employees, writing things down is crucial to ensuring the message is clear and agreeable to both parties. Even more important is the business’ need to show that an employee is or was aware of a certain policy or procedure. Let’s use an example of an employee terminated for violating a certain policy. That employee attempts to get unemployment insurance or worse, retains a lawyer in an action for unlawful termination. If that policy is in writing and the business is able to show that the employee was aware of the policy, it would be much harder for the judge to side with the employee.
Key Employee Documents Checklist Entrepreneurs Need
Below are a few key items that should be in writing with a signature page from each and every employee you have.
- Employee Handbooks – obviously from the example above, policies and procedures must be in writing.
- Performance Reviews – whenever you tie performance feedback to compensation increases, it must be in writing. A business should be able to show that when it comes to compensation, all levels are treated the same.
- Offer letters – each and every employee should get an official offer letter. This will only enhance your “at-will” or “EEO” policies and confirm that both parties agree to the offer. Especially if special circumstances are negotiated, such as extra vacation time, it is important to put this in writing.
- Disciplinary Action – unfortunately employers may have to discipline employees. When this happens and especially if there could be further action leading up to a termination, there should be written documentation.
This list is certainly not meant to be exhaustive, but it highlights the most crucial pieces of documentation every business should keep. The ability to produce this type of information should it ever be needed can make all the difference when dealing with human capital issues.