Creating a Company Policy

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Get it in writing. Those four words can save a lot of headaches for business owners and employees alike. This is why shops should consider not only creating a company policy manual that spells out the dos and the don’ts, but ensuring it is read, maintained and updated as needed. That way both the employer and employee have ground rules to help a shop run smoothly and ensure simple misunderstandings are avoided.

It all begins with setting the ground rules. Not only should it include the basics, but it needs to be reviewed and updated to keep up with company policy and changing regulations. The policy manual should be there to protect the shop’s interests, but also to help it run smoothly.

“A handbook provides clarity to employees regarding your policies and expectations,” said Mark Souther, human resources director for the Oilstop Inc. chain. “The absence of a formal handbook or policy manual, or a poorly drafted one puts you at a disadvantage to defend yourself should you face a lawsuit. Numerous federal, state and even local laws affect the content of policies and procedures and should absolutely be included in any such handbooks.”

What Goes In

There is a laundry list of items that must be included in a company policy manual, according to shop owners and HR managers alike. This includes a clear definition of who is covered by the handbook, as well as an overview of existing policies and practices.

Relevant topics can include company or shop history, expected employee behavior, details on paid time-off policy, benefits, the shop’s anti-harassment policy, equal employment opportunity policy, FMLA Policy (for shops and/or companies with 50 or more employees), pregnancy and disability leave policy, workers’ compensation policy, employee privacy, employment at-will, fair employment practices, polices on the monitoring and/or use of electronic communications, reasonable accommodation, confidential information and complaint procedures.

The above list is just some of what should go into a policy manual, but what’s important is it is written down in plain, simple language so there is no misunderstanding.

“If this stuff isn’t in writing, it didn’t happen, and as a shop owner, you’ll have no leg to stand on,” said John Richi, owner and general manager of Pro Lube Auto Center in Northampton, Massachusetts. “We have a corporate policy, and it has come in very handy in unemployment hearings. You can’t be vague about anything.”

This isn’t about allowing the bosses to be tyrants or to make for a hostile workplace, however. In fact, the company’s policy is there for the employee as much as the employer, and to ensure that shops run as safe, efficient and even friendly workplaces.

Put simply: “It lets an employee know where they stand and what is expected of them,” Richi said.

Determining what goes in could be considered a mix of common sense policies combined with federal, state and local regulations.

Oilstop put its policy together through a compilation of such company policies and procedures as well as legally required notifications. After this was compiled, the completed manual was then edited and approved by the company’s legal counsel to ensure it was binding to all parties who need to follow it.

This can sound like a daunting task, and many shop owners may worry about simply where to begin. However, the process can be straightforward.

For Checkered Flag Express of Marysville, Ohio, the company policy began with a shell of a manual on the AOCA website, while additional information was obtained from the local Chamber of Commerce and from SCORE (Service Corps of Retired Executives), the nonprofit organization providing free business mentoring services to entrepreneurs in the United States.

“Some of the rest of our policies came from situations that arose in the shop and from discussions I participated in on AOCA Talks,” said John Wall, owner and operator of Checkered Flag Express. “It’s a forum where other owners and managers across the nation discuss how they do things, and/or ask the crowd for feedback. It’s an extremely useful tool. We then make sure we are legally in the right by having our attorney review our handbook. It is relatively inexpensive, and prevents any legal issues down the road.”

What Doesn’t Go In

Just as important as what should go into a handbook is what doesn’t go in. The most obvious is humor, jokes or anything that could be misinterpreted. This sort of information is best avoided. The policy manual is a rulebook first, last and always. It is just as important the policy manual not include information that is irrelevant or could open the door to a misunderstanding.

“You shouldn’t put any polices or procedures that are not actually being followed,” Souther said.

Again, the policy manual is about the rules, so personal information and other non-relevant details should be avoided. This extends to details about pay structure or information about career path. While useful information, the corporate policy manual isn’t the place for it. Likewise, material of a sensitive nature is best kept out.

“We avoid any religious or political items,” Wall explained. “If we are made aware of any religious guidelines that don’t match up with our standard holidays, we ask the employee to make us aware and we make the needed adjustments.”

Keep it Updated

Just as drivers need to keep their cars on an oil change schedule, shop operators should adhere to a regular schedule for updating to the policy manual.

“We update the manual frequently,” Wall said. “Things change in our business frequently. Also, new legal requirements may pop up that we need to address. We make sure to update the entire manual. Then we present the updated policy in a team meeting.”

At this meeting, Wall said is the time to discuss the policy and make sure that everyone is on the same page.

“We again have them sign off on the addendum and keep it in their employment file,” Wall added.

There is no set time for how often policies need to be addressed, but when something changes the manual should be immediately updated and the entire team notified of the changes. It is up to shop operators to know when the time is right, but annual or semi-annual updates are recommended for those operators with multiple shops. Outside factors as well as changes to the business itself should be considered.

“The best practice for an employer is to frequently review new case rulings, regulations and trends in the workplace and ensure the employee handbook is up-to-date with current law,” Souther explained. “In addition, if there have been any recent discrimination or harassment issues in the employer’s workplace, the relevant section should be reviewed for clarity and possibly updated to include new procedures or requirements.”

In the Employees’ Hands

The policy manual should be one of the first things provided to a new employee, because as already noted it sets the rules and can clear up any misunderstanding.

“It should be supplied to employees at the time of hire either in hardcopy form or electronic,” Souther said. “Digital format is preferred because it can easily be updated and redistributed.”

“We only have 12 employees, but the policy manual is still a big deal,” Richi said. “I think 85 percent of our employees take the time to read it, and many might even keep it in the glove box. We make sure everyone is provided with it.”

The first day of work is an ideal time to receive a policy manual.

“We present the manual to our new hires during their orientation,” explained Wall, who noted he has employees take it home and review it. Then he said they go through all of the policies one by one to reinforce them and answer questions.

Having the manual in place allows employees to start work on the right foot and help them understand clearly what is expected of them and what they can expect from their employer.

“We have the new employee sign a page acknowledging their having reviewed and been made familiar with the policies, and we make it part of their permanent employment record,” Wall added. “That way, if something arises later, we can refer back to it as proof we had set the expectation they may have violated.”

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