What is an Employee Handbook?

An Employee Handbook serves as a reference guide for the employer and

employees. It outlines the rights and responsibilities of the employer and
employees, the policies and procedures implemented by the organisation and
the overall culture of the work environment. An Employee Handbook is usually
prepared comprehensively and provides clarity on several aspects of
supplementary employment terms and the division of roles within the
organisation. Organisations that have an Employee Handbook in place typically
require all employees to read and understand the contents of the Employee
Handbook as part of its onboarding or training process to align the employees’
expectations with the organisation’s mission and objectives.

The contents that an Employee Handbook covers vary from organisation to

organisation. Nevertheless, the following are some crucial points for an
organisation to consider when preparing an Employee Handbook:

1. About the Organisation

Employees should know and be familiar with the organisation’s inception,
corporate structure, mission and objectives. It is good practice for employees to
be aware of the significant milestones achieved by the organisation.

2. Employment with the Organisation

The Employee Handbook should state the general terms of employment for
each division of personnel, including roles and responsibilities, advancements,
transfers, compensation and reimbursements, training opportunities, work
hours and overtime. It is also important that the Employee Handbook sets out
the rights of its employees.

3. Procedures
The standard operating procedures of an organisation provide the methods by
which the organisation executes an action. This serves as a reference for
employers, employees and selected committees to observe and adhere to the
implemented procedures for various matters, such as recruitment and hiring,
onboarding, performance management, complaints and grievances, and
termination of employment.

4. Policies
The Employee Handbook should include all policies implemented and effected
by the organisation. These policies provide employees with the necessary
information on various aspects of employment within the organisation. Such
policies may include a privacy policy, anti-bribery and corruption policy, anti-
money laundering policy, whistleblowing policy, discrimination and harassment
policy, disciplinary policy and employee disability policy.

5. Code of Conduct
An employee code of conduct is essentially a set of guidelines and principles
that outline the ethical standards and professional conduct expected from the
organisation’s employees whilst maintaining and safeguarding the
organisation’s values. A code of conduct will outline elements such as
professionalism, ethical standards, integrity, diversity, office romance or
relationships and compliance.

Benefits of an Employee Handbook

The adoption of an Employee Handbook can contribute in various ways to a
positive work environment that is more effective, organised and transparent.
There are various benefits to an Employee Handbook, some of which are as
follows:

1. Efficient Onboarding
An Employee Handbook contributes to an efficient onboarding process for
incoming employees, with incoming employees enjoying a consistent
onboarding experience. If employees fail to observe the expected standards and
policies, they cannot give the excuse that they were not aware of them, as the
expected standards and policies were pointed out to them during onboarding.

2. Centralised and Standardised Information

An Employee Handbook is a centralised source of information that is
standardised across the board. It also serves as a centralised source of
communication between management and employees. All employees must be
accountable for reading, understanding, and adhering to the Employee
Handbook.

3. Empowerment and Transparency

Employees are empowered with standardised and transparent information that
is provided to them by their employers. Furthermore, if the Employee Handbook
outlines training and career advancement and progression, the employees will
be equipped with all necessary information to make informed decisions for their
respective careers in the organisation.

4. Legal Compliance and Mitigation

As a centralised source of information that comprises policies and standards, an
Employee Handbook contributes to the organisation complying with the labour
laws in Malaysia and outlining employees’ statutory rights, obligations and
benefits. Such contributions can reduce the risk of potential legal issues or
disputes, be it an issue of non-compliance or a dispute between the
organisation and an employee.

5. Management and Retention

An Employee Handbook ensures consistency in standards and policies, allowing
the organisation’s management more time to address specific individual
concerns that the Employee Handbook could not address. Effectively managing
employees and addressing their concerns can contribute to employee
satisfaction, resulting in higher employee retention.

Conclusion
The benefits of adopting an Employee Handbook extend far beyond legal
compliance. The move to adopt an Employee Handbook can be an
organisation’s strategy to achieve various objectives, such as employee
retention and efficient overall management of employees. If prepared
comprehensively, an Employee Handbook is valuable for any organisation and
can significantly contribute to a positive and sustainable work environment.
Although organisations don’t need to have an Employee Handbook under the
laws of Malaysia, organisations are encouraged to prepare an Employee
Handbook to safeguard their interests as well as the interests of their
employees. This can ultimately lead to sustainable growth and success of the
organisation.

If you would like to explore the strategic move of adopting an Employee

Handbook or to gain a better understanding of the benefits and dynamics of an
Employee Handbook, we invite you to reach out to our Employment and
Industrial Relations Team. We are committed to assisting your organisation in
achieving its objectives and growing its business continuously and successfully.