Answers to common questions about personnel policies, including maintaining personnel files and evaluating employees.
What’s Below:
What should I keep in employee personnel files?
Who is allowed to see an employee’s personnel file?
Do I need an employee handbook?
How do I avoid legal problems when giving employee evaluations?
How can I discipline problem employees without getting into legal trouble?
What should I keep in employee personnel files?
You should keep a personnel file for each of your employees, containing every important job-related document, including job applications, offer letters, employment contracts, benefits and salary information, government forms, performance evaluations, and disciplinary actions.
However, there are some things you shouldn’t keep in personnel files: I-9 forms and medical records. For each of your employees, you must complete and keep Form I-9, provided by the agency now known as U.S. Citizenship and Immigration Services (USCIS, formerly called the INS). You should keep these forms in a separate I-9 folder for all employees, however, not in the employees’ individual personnel files. As to medical records, the Americans With Disabilities Act (ADA) imposes strict rules on the use of information obtained through medical examinations and inquiries.
For more on personnel files, including tips on keeping them up to date, see What to Keep in Employee Personnel Files.
Who is allowed to see an employee’s personnel file?
In most states, employees — or former employees — have the right to inspect at least certain documents from their own personnel files. Typically, if your state allows employees to see their files, you can be present for the inspection, to make sure nothing is added, removed, or altered.
Generally, you should treat personnel files as you would any other private records. Limit access to those with a need — or a legal right — to the information. A reasonable policy might allow access to you, the employee, and the employee’s supervisor or manager, as necessary, to make personnel decisions.
To learn more about keeping personnel files confidential while allowing access to those with a need or right to inspect them, see Keeping Personnel Files and Medical Records Confidential
Do I need an employee handbook?
There is no law requiring employers to have an employee handbook, but it’s a good idea. A handbook lets you inform your employees about your workplace rules in an efficient, uniform way. Your employees will know what is expected of them and what they can expect of you. And you will be able to prove that all employees were aware of the rules if an employee later decides to challenge you in court.
An example of a policy you should include in an employee handbook is an email policy to reserve your right to read email messages, in case you’re ever faced with an employee who engages in misconduct in cyberspace (by sending harassing messages or revealing company trade secrets through email, for example). Your policy can also explain the rules on using the email system to send personal messages, how often you will purge email messages, and more. (For more information, see Email Security Policy: Why You Need One for Your Employees.)
For more suggestions on what to include in an employee handbook, see Why You Should Create an Employee Handbook.
How do I avoid legal problems when giving employee evaluations?
Create an evaluation form for each job category that focuses on the skills needed for successful job performance. Focus on job duties, not personality traits. Some generally appropriate considerations are work quality, dependability, punctuality, and communication skills. Allow your employees to see the form ahead of time, so they will know the basis for their evaluations.
Be honest and consistent with your employees. Try to maintain an overall positive approach so your employees will be motivated to improve, but don’t sugarcoat the bad news. Give your employees a real opportunity to improve by giving them constructive criticism and performance goals. And make sure to back up your evaluations with real consequences: If an employee is far exceeding expectations, consider giving a raise or other recognition. If an employee is having serious performance problems, discipline might be in order.
For more on employee evaluations and performance appraisals, see How to Conduct Employee Evaluations.
How can I discipline problem employees without getting into legal trouble?
First, you need a clear written disciplinary policy. This will let your employees know what to expect if they fail to meet your performance standards. But be careful not to limit your ability to fire employees “at will” (that is, for any reason that is not illegal).
Next, apply your policy fairly and consistently to all employees. Avoid claims of discrimination or favoritism by imposing similar discipline for similar offenses. Make sure your employees get the message: Be honest and up front in your criticism, listen to your employee’s response, and try to work together to resolve the problem.
Finally, document everything. Whenever you have to discipline an employee, take notes and place them in the employee’s personnel file. If the employee later decides to file a lawsuit, you will have proof that the employee was warned about performance problems and was unable to improve.
© 2010 Nolo