Assume your company currently has four employees and you have decided to add one more to handle the increase in sales, a great "problem" to have. You made an offer that was accepted and he 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 system password and part by letting 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 have a "shop talk." "Nuts and bolts" topics are discussed--like "paid vacation time-off." Your longer-term employee tells your new hire that 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 were 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 was deep in thought--"What probationary period? I don't remember it being mentioned --hum. . ."Your new hire takes advantage of your open- door policy and asks if you have a minute. You start the conversation by saying, "You are really doing a great job. I want you to know how pleased I am. What can I do for you?" Your new hire asks: "Am I on probation?" You respond: "Oh, that 'Technically' all newly-hired people are considered probationary." He asks you: "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 with your people but it illustrates the point.

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 year????"

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 (see sample HR policies that follow). You have had several discussions with him trying to re-engage him in the business, but to no avail. You have told him what you expect in fairly explicit terms, but his work has not improved. After three months of this, you've had enough and 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 only, and keeps to himself. He doesn't seem to be interested in being part of the team. He hasn't come up with any more suggestions for improvement and he has turned into a strictly "9-to-5" employee. He doesn't help out any of his co-workers when they are under the gun. 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. This upsets you greatly-- you feel betrayed-- so you confront him and ask if he is spending work time to do personal business. He looks you in the eye and indignantly says, "Absolutely not."

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

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

FOR BOTH SCENARIOS, he files for unemployment and is denied benefits because of the good job you did in following your "reasonable" HR policies.

What Are the Basic HR Policies that Should Be Included in a Policy Manual?

• A brief description of your company that includes your company's legal name
• Introductory HR Policy Statement that includes an "employment at will" statement that says the employment relationship may be ended at any time by either the business or the employee without reason
• An established probationary period that new employees must successfully complete before they are considered "permanent" (sometimes this probationary period must be completed before new employees are eligible for benefits)
• Performance Evaluations and Compensation information-when salary reviews/increases are considered
• A list of benefits you provide to your employees
• A list of holidays
• A statement of your vacation policy
• A statement on how you handle time off for illness or injury (sick time)
• A list showing examples of reasons for which you can and may terminate someone's services
• A statement that the business has the right to conduct drug/alcohol tests for current employees and all persons who have been offered a position with the business
• A statement about acceptable and unacceptable uses of your business' electronic equipment/computers and that the business has the right to review all employee electronic media
• A confidentiality, non-disclosure, intellectual property agreement that all employees must sign and agree to at the time they are hired
• A non-compete agreement to be signed at the time of hire for employees who will be engaged in sales and/or in the creation of proprietary products or who have access to proprietary or customer information, or are in sales.

Examples of all of these HR policies (and agreements that should be signed as part of the employment process) are provided for your use in Chapter 2.