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Personnel Policies and Practices FAQ

Here are our answers to the most frequently asked questions about personnel policies, including how best to keep personnel files as well as evaluating employee performance.

What kinds of things should be kept in employee personnel files?

It is good and common practice to keep personnel files for each of your employees. These files should contain important job-related documents, such as the employee's job application, offer letters, any employment contracts, information relating to any medical benefits, salary information, miscellaneous benefits, required government documents, performance evaluations and any documents relating to employee discipline.

However, it is important to be aware of other laws regarding employee documents. For example, I-9 forms must not be kept in an employee's personnel file. Instead, you must complete and store employee I-9 forms in a separate folder. (I-9 Forms are provided by the United States Citizen and Immigration Service and are related to an employee's eligibility for employment).

In addition, any medical records that you keep of your employees should not be stored in that employee's personnel file. The Americans with Disabilities Act provides strict rules that must be followed with regards to employee medical records.

You can find out more about what to keep inside of employee personnel files in this article: What You Should Keep in Your Employees' Personnel Files.

Should I limit who has access to personnel files? If so, who should be allowed to see the contents of an employee's personnel file?

Generally speaking, personnel policies should limit who has access to personnel files. It is almost always a good idea to keep personnel files in a locked file cabinet. In addition, if you are keeping electronic copies of personnel files (for example, if you scan and upload all employee documents into a computer), you should make sure that all the files are password protected.

In most states, employees (and sometimes former employees) are allowed to see the some of contents of their own personnel files. If you live in a state where employees are allowed to see their personnel files, you (as the employer) will generally be allowed to be present during the inspection to ensure that the employee does not alter his or her file in any way.

In addition, it is sometimes a good idea to limit the number of higher-ups that have access to personnel files. Some companies make it a policy that only the director of the company and an employee's manager have access to personnel files. It is always a good idea to try to limit access to personnel files to those that absolutely need it.

You can find out more about the confidentiality of personnel files and allowing access by reading this article: Who Can Look at Employee Personnel Files?.

Is it necessary for me to have an employee handbook?

Generally speaking, it is not usually required by law that you provide your employees with an employee handbook. However, with that said, it is almost always a good idea. An employee handbook allows you to inform your employees of the expectations that you have of them and gives you a chance to familiarize them with your personnel policies. In addition, an employee handbook can also let your employees know what they can expect from you. Lastly, and perhaps most importantly, you can lay out your company's rules within an employee handbook. If any employee ever challenges you in court, you will be able to show the judge that the employee received a copy of the rules at the start of their employment.

There are many examples of rules and policies that should be contained within an employee handbook. As one example, you should probably include your company's stance on harassment inside the workplace. Going along with this policy, you should also include your company's disciplinary policy.

One feature that is being seen more and more in employee handbooks are policies relating to employee use of the internet and e-mail. With regards to e-mail, many companies now retain the right to periodically inspect and read e-mails contained within employee e-mail accounts (company accounts, not personal accounts). By having such a policy in place, you can protect against employees mailing out private information about your company, such as trade secrets. In addition, within this policy, you should explain your company's stance on using company e-mail accounts for personal e-mails.

There are a whole host of other policies and rules that should go into an employee handbook. To learn about other things that you should consider putting into your company's employee handbook, see FindLaw's Guide to Creating Employee Handbooks.

What steps should I take to avoid legal problems when conducting employee evaluations?

One of the best steps that you can take to avoid legal problems when it comes time for employee evaluations is to create an evaluation form for each job category. All of the job categories should relate directly to job performance. Some examples of job categories include the quality of work (or work product if needed), punctuality, dependability, and communication skills. You should try not to have the employee evaluation focus on personality traits. In addition, be sure that your employees have access to the form before evaluation time. By doing this, you lessen your chances of legal problems because the employees will have prior knowledge of what they are being evaluated on.

It is always a good policy to be honest and open with your employees. Instead of making evaluation time a feared event, be creative and constructive with any criticism you have. Remember that one of the great benefits that comes with well-handled evaluations is that your employees may be more motivated to improve. However, be sure not to sugarcoat any bad news that you may have -- be direct, but respectful.

Lastly, you should be sure that employee evaluations are not just formal, but functional as well. If you have a few outstanding employees that blow away their employee evaluations, be sure to reward them in some way (perhaps a raise or some sort of public recognition). On the other hand, if you have employees that are not doing so well in their evaluations, don't hesitate when penalties are needed. Placing employees on probation after two or three bad evaluations could be in the best interests of your company.

What steps should I take to avoid legal problems when I am disciplining a problematic employee?

The best step that you should take to avoid legal problems when disciplining an employee is to have a clearly written and understood disciplinary policy. By having such a policy in place, your employees are already on notice about what they can expect if they stand to be disciplined. When you draft your discipline policy, you should be careful not to limit your ability to fire "at-will" employees.

The next step that you should take is to make sure to apply the discipline policy fairly and consistently. You should always do your best to avoid claims of discrimination by making sure that similar offenses are met with similar disciplinary procedures. In addition to applying your discipline policy fairly, you should also make sure to listen to any concerns your employees may have.

Lastly, whenever you are forced to undertake a disciplinary proceeding, be sure to take meticulous notes and document the entire proceeding. Place all of these notes and documents within the employee's personnel file. If you fire an employee and they decide to turn around and sue you, you will need to have proof that your employee knew and understood the discipline policy and that you acted in accordance with the policy.

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