An employee handbook which clearly conveys the company's policies to employees may reduce litigation by clarifying company rules and benefits and communicating expectations for behavior. Companies with 50 employees need a Family and Medical Leave Act policy. The laws of the state where you have offices and your individual circumstances may necessitate additional policies. In an effort to establish a relaxed, creative and freely structured environment, emerging companies are often tempted to abandon traditional corporate practices like performance evaluations. However, employee performance evaluations are a vital personnel tool.
Evaluations are often central to the defense of a layoff or termination decision.
Care should be taken to train managers and supervisors how to conduct performance evaluations which will place an employee on notice of performance deficiencies, provide employees with an opportunity to remedy substandard performance, provide an employer with a valid basis for comparison in personnel decisions such as merit pay increases, promotions, transfers and reductions in force and provide the company with a defense against discrimination and wrongful dismissal claims. No company is immune from the potentially devastating effects of a sexual harassment charge. In new companies, where the hours are long and the atmosphere is often casual, the line between a casual work environment and sexual harassment is easily crossed. An effective sexual harassment policy and implementation of that policy through sexual harassment prevention training programs will assist management in creating an appropriate work environment, as well as help insulate the company from liability and protect against punitive damages in the event a sexual harassment action is brought against the company. While this can appear cost effective, this allocation of duties can result in costly mistakes.