Assume your company currently has four employees and you have decided to add one more to handle increased sales. You made an offer that was accepted, and the new hire starts today.

You meet with your new employee to do the orientation, so you launch into a description of his role, your typical work day, etc. You escort him to his work station, introduce him to his co-workers, give him the password to the computer system, and let him know you are available to answer any questions and that your “door is always open.” You let him know how pleased you are to have him on board.

His first week is a good one. He learns your customer service system quickly and even makes a couple of time-saving suggestions. He is fitting in and working really well.

During his second week, the new hire and another of your employees go to lunch and discuss work. Your longer-term employee says she is getting three weeks of paid vacation per year and is taking a week off next month to go on a cruise. Pay increases are also discussed, and your longer-term employee tells your new hire that she got a raise at the end of her six-month probationary period.

Walking back to the office, your new hire is deep in thought–”What probationary period? I don’t remember it being mentioned.” He takes advantage of your open-door policy and asks: “Am I on probation?” You respond, “Oh, that! Technically, all newly-hired people are considered probationary.” He asks, “What do I have to do to pass probation?” and you respond, “Just keep doing the good work you’re doing for six months.” He queries you further: “And you’ll let me know ASAP if I’m not?” and you say, “Absolutely.” He asks, “Once I complete the probationary period, does anything else change?” and you sheepishly reply “Oh yes, I forgot. At that time I will review your pay to determine if we need to make an adjustment.”

It is unlikely this exact sequence of events has ever happened, but it illustrates the importance of having and communicating Human Resources (HR) policies.

REASON #1 – Your people need to know the rules. They will have questions, either about what you told them and they forgot, or about what you forgot to tell them in the first place. The best way to make sure your people have the information they need about the employment relationship is to give them written HR policies as soon as they are hired.

The conversation above continues. “One more thing,” he says. “I don’t recall discussing the paid vacation policy. If you shared this with me during our interview, please forgive my forgetfulness.” You reply, “You will receive two weeks of paid vacation after you have completed one year with us.” Without another word, he walks out of your office muttering, “Two weeks after a whole year? How come my co-worker gets three weeks?”

REASON #2 – You owe it to your people to maintain reasonable consistency in how you treat them when it comes to “standard” policy issues like paid time off.

After the exchanges above, how motivated do you think the new hire was to continue excelling? Here are two scenarios to consider:

  1. He is so upset he stops doing good work while he is still in his probationary period. You have several discussions with him, trying to re-engage him in the business, but to no avail. After two months of this, you terminate him while he is still on probation.
  2. He makes it through the probationary period, barely, but at best he is a mediocre employee. He does his job, but keeps to himself and doesn’t seem to be interested in being part of the team. One of your other employees said he seems to waste a lot of time and that he may even be using the Internet for a job search during work hours.

In accordance with your HR policy that spells out your right to review all files (hard copy and electronic), you come on Saturday when no one is in the office and start looking through his e-mails and Internet cookies. What you find appalls you. Not only is he spending your time doing a job search, but he sent a copy of your confidential customer list to one of the companies to which he has applied for work.

That is it. Monday morning you call him into your office and fire him for falsification of information, unauthorized disclosure of business secrets, unsatisfactory performance, and misuse of company property/equipment.

In both the scenarios above, he files for unemployment and is denied benefits because of the good job you did in following your “reasonable” HR policies.

REASON #3 – It is much easier to take a negative employment action if your HR policies are written, reasonable, distributed to your employees, and you consistently follow them. While there is no guarantee that a terminated employee won’t file some form of complaint or action, you are in much better shape with HR policies in defending your decision and actions, than you are without them.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.