Do You Really Need that Employee Policy?

I enjoyed reading the new book Rework, by 37 Signals founders Jason Fried and David Heinemeier Hansson, which is filled with straight-forward tips for running a successful company.  Regarding employment policies, they say:

The second something goes wrong, the natural tendency is to create a policy.  “Someone’s wearing shorts?”  We need a dress code!”  No, don’t.  You just need to tell John not to wear shorts again.

Policies are organizational scar tissue.  They are codified overreactions to situations that are unlikely to happen again.  They are collective punishment for the misdeeds of an individual.

This is how bureaucracies are born.  No one sets out to create a bureaucracy.  They sneak up on companies slowly.  They are created one policy – one scar – at a time.

So don’t scar on the first cut.  Don’t create a policy because one person did something wrong once.  Policies are only meant for situations that come up over and over again.

After writing and revising hundreds of policies and employee handbooks, I wholeheartedly agree with Fried and Hansson.  I would add to their suggestion that many policies already adopted should be discarded.  Some policies, such as an anti-harassment policy, are needed.  But many other policies are unnecessary and may create an unintended liability risk.

For example, some employers have a policy telling employees it will recall employees based on certain factors, such as seniority.  When the rehire decision is actually made, the employer often wants to ignore the policy by basing the decision on other factors or hiring someone new rather than recall anyone.   Because of the policy, someone not recalled pursuant to the factors now has an argument that the employer is liable for not following its policy.  In essence, the company made things worse by creating a risk that otherwise would not have existed.

In return for this increased risk, I think the company got little, if any, benefit from having the policy.  I doubt that the when the employee got the policy he or she felt any better about the company because of the policy.   Many times, employees read a policy once, if at all, when hired and then not again until after they are no longer employed and have consulted a lawyer.   It is then that many policies become important for the first time — as weapons against the employer.

You may disagree on the benefit or risk of this or any other policy.  The important thing is to not have any policy without first thinking through how the policy will really work in practice, what it actually accomplishes, what are the risks, and whether any benefit actually outweighs the risk.