Management by Exception or Exceptional Management

I cannot say how many employee handbooks I have read, many hundreds at a minimum. I say this not to brag but to lay a foundation of experience and a solid reason for the new stronger prescription for my reading glasses.

I came to read employee handbooks from two purposes. I read them as part of a due diligence investigation when looking at the company that my client wishes to invest in or acquire, or as a matter of compliance for a financial service firm.

When I read the manuals and begin to understand them – one of the first things I do is a word count or a page count if in hard copy. I have read employee manuals as short as 3,200 words and as long as 401,000 words, as short as 9 pages and as long as 305 pages. So here is where you, my reader, asks the question – “Whoa – what’s the difference – can 9 pages be as good as 305 pages?” It is a good question. The size of the manuals provides for some surprising inferences you can make at both ends.

An employee manual is supposed to be about familiarizing an employee with the business. It is about drawing some inferences that need to be made about expectations of the employee and the employer to and for each other. While there are some sections required by federal and state laws – the rest should be pretty direct.

The dark truth is that about 90% of employee manuals – they are “make wrong tools”. They are a tool for the worker to make management wrong and for management to make workers wrong. I have seen some employee manuals that if actually implemented, as opposed to rightfully ignored, would make compliance and work mutually exclusive.

How asinine have they been made? A dear friend ended up in court over her bathroom breaks. She was given a bad review and several letters of reprimand for too many trips to the rest room. Ultimately, she was blocked from obtaining a raise because of the number of reprimands. She had a very good reason, do to an injury from a car accident she had half of her colon removed. Thus, when she had to go she went to the bathroom. She had very little warning and when it was time she just had to go. The medical condition had been shared with the supervisor and the supervisor said, she was just going by the manual. So the litigation centered on some of the non-discrimination language toward handicapped persons with the American’s With Disabilities Act causes of action added on. It went poorly for the supervisor and the employer. Both used the employee manual to make each other wrong. It was an utter waste of time talent and treasury that can only happen in a big company.

Most manuals grow by exception. Every time something happens the employer does not like they shoot off an email to the firm’s lawyer and a new policy is drafted and implemented. The problem here is three fold. One, no analysis occurs as to why something was being done that was upsetting to senior management. Second, every word in an employee manual adds complexity and impacts other compliance matters as well as productivity. Last – the lawyers write long complex sentences with way too many adverbs and adjectives. For example;

Harassment is generally defined as unwelcome verbal or non-verbal conduct, based upon a person’s protected characteristic, that denigrates or shows hostility or aversion toward the person because of the characteristic, and which affects the person’s employment opportunities or benefits, has the purpose or effect of unreasonably interfering with the person’s work performance, or has the purpose or effect of creating an intimidating, hostile or offensive working environment.

That is only one sentence. There are enough adverbs and adjectives that no group of reasonable persons would agree upon a single definition. The meaning of a word is based upon both some commonalities as well as each person individual’s life experiences? For example the term “robust” and its use. “Our compliance department will make robust efforts toward sorting out and finding non compliant customers”. OK, now define “robust”. Is it reasonable to assume that the compliance manager, a regulator, and a judge will all have different definitions of the effort implied in the term “robust”? This type of language is hardly a solid foundation from which to work. As for me, isn’t “robust” a type of coffee?

The employee manuals of extravagant length are a tangible evidence of managing by exception. The employees can do anything they want except if it upsets management. This type of managerial environment as evidence by the extravagant size of the employee manual is a toxic environment. A client of our’s who buys businesses will always call me on the first day of our due diligence work and ask – “Page count?” Any answer with a number over 75 pages – he gets very excited. He knows that there is wasted time and wasted potential he can tease out under new management.

Conversely, employee manuals that are too thin such “Can’t we all just get along and work?” is evidence another managerial issue. This is typically what you see in a company run by an entrepreneur and or run by a family. Rules and guidelines are more informal and often made up on the spot. These can be very effective organizations and their will be few misunderstanding about what is needed as often the owner and or the family members are in close or direct communication. The short comings will be in compliance and the disparity between the expectations of employees and management when growth stains the once familiar lines of communication and authority.

A reality of all employee manuals is that the author stole copy from another manual. Than the author looked about the internet and harvested text from other sample employee manual that look good to them. Contain your fauxshock! It is so bad that I have often seen a manual possessing three or more type fonts, dissimilar kerning and words like “colour and labour” telling me the authors may have gone a bit too far in their search for material. The other type of manual is written by talented well meaning lawyers who deal in, and define as best they can, precise meanings to their thoughts reflected in their sentences. They are doing their best but much of the complex sentence structure leads directly toward ambiguity. Combine ambiguity of rules and an upset employer or employee and that spells litigation.

The best employee manuals are thin and focused. They communicate the required materials and clearly set forth the expectations of the employer of the employee and yes, the expectations of the employee has of the employer. The sentence structure throughout the manual is one that eschews verbosity conjoined with obtuse referents. A good employee manual is made of simple declarative sentences. It avoids adverbs and adjectives. It can be read by an 8th grader. It is easily understood. It provides for exceptions. It allows management to be come exceptional management

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