Employee Handbooks: Out With the Old, In With ... What Exactly?

The employee handbook: every company has one, yet most employees never lay eyes on it after they get out of new-hire orientation. And who could blame them? "Today's employee handbook feels so antiquated," says Michael Molina, chief human resources officer at San Diego-based Vistage International, a membership organization that provides executive coaching to CEOs of small and mid-size companies around the world. "Let's face it," Molina says. "An employee handbook, you pick it up on day one and you put it down unless you have a question."

Small wonder, then, why innovation-focused companies such as Netflix and Zappos have experimented with more compelling handbook alternatives -- such as colorful, engaging slide presentations that showcase the company’s values, vibe and culture and downplay rules and policies, reference them in other documents or leave them out altogether. San Francisco-based Zaarly, a startup that supports a network of local merchants in selling their crafts (think Etsy for service and merchandise) has taken the concept a step further: Listed in the "Rules for Work" section of its of new employee "handbook" is a provocative mandate: "We do not have these."

Most companies may not go to the extreme that Zaarly has, but the traditional employee handbook that lays out employees rules and regulations certainly deserves a makeover. In an effort to recruit fresh-faced talent and create an engaged work environment, businesses are hoping that focusing on the good stuff (core values, perks, cool culture) will make the not-so-fun stuff (regulations, rules, fine-print) obsolete. As Molina explains, "In general they are far less detailed and serve as an advertisement for new employees."

But is that enough? Is there a happy medium to strike for companies that want to impress new hires with humor and personality, but also recognize the value of clear policy information on issues ranging from "WFH" (working from home -- a hot topic again) to social media policy to discrimination and fraud? The "no rules" concept may not be for every company, or even most companies, but it doesn't mean existing policies can't be rethought. As Molina explains, some companies are adopting a two-pronged strategy: pairing a more compliance-heavy handbook with another focused on company culture. "You can have a great work culture and still have an employee handbook about ethical standards and computer usage standards, with great responses from employees," Molina says.

So what does a successful two-pronged approach look like? Here are a few helpful rules of thumb:

"The handbook needs to be representative of the daily experience," Molina says. "You don't want to walk into a culture where everyone looks like a drone. When future hires walk in the door, they immediately get a sense of who you are as a company. You can tell them whatever you want in the handbook, but an employee smells the actual experience out very quickly. You have to be able to articulate that within a week or a month of what that environment is going to be like."

He's right: According to data collected by The Wynhurst Group, 22 percent of staff turnover occurs in the first 45 days of employment. If new hires feel lost, they need more than a presentation or a pithy page to understand their new work environment. The culture of the place comes out if you'd like it to or not, just by being there.

A truly no-rule environment can't exist in today’s workplace. Policy and procedure help protect both the employer and the employee -- and they shouldn't be ignored. There is room for people to be hurt and also skirt responsibility if rules are not set in place. No matter how old or experienced your employees are, lack of clear-cut rules can backfire. In fact, most ethical problems arise when employees have an out or an excuse, says Chris MacDonald, professor of ethical leadership at Ryerson College in Canada. With no rules, the "I didn't know" excuse can run rampant.

"I think it's a gimmick to say you don't have a handbook," Molina says. "You can't operate without practices and policies and laws. So if a company wants to position itself properly, it has to set two things in place: something that tackles the culture and something that highlights the management practices followed. There are rules that you have to have in a company and they should be available to the employee. That being said, you must insure that the rules are representative of the daily experience in the workplace."

It's important to attract and retain talent -- but even more important to stay genuine. Employees can see through the diatribe of a slick but substance-lacking handbook like Zaarly's. After all, the substance is what will hold the entire endeavor together. Yes, Zaarly throws around some fun and shocking phrases -- "You may speak to, call, email or have a meeting with anyone. Even if it's your first day. Even if you don't know their name. Even if they have a mustache," the handbook reads. But the piece also contradicts itself: calling for face-to-face communication as a tantamount practice while also encouraging employees to work from home or blast Skrillex if it makes them more productive. Furthermore it offers some tasteless jabs as other companies: "If you want to coast, we recommend you apply for a job at Craigslist."

"I don't think a handbook replaces what you do day in and day out," Molina says. "I want new hires to feel as though they're coming to a place that is engaging and where the culture fits the company's values through the spirit of the right leadership and right energy. If whatever tool we use reflects that, then I think we've been successful."