by Edgar S. Ellman

Sound personnel policies help attract and retain good employees. They also reduce costly turnover and minimize lawsuits and labor law complaints. And, they save you valuable time.

Ill-advised personnel policies could be costly for your company. Bad policies result in poor morale, management headaches and loss of good employees.

Here are some guidelines on what not to do when setting personnel policies:

Bad policy: It is against our company policy for you to discuss or compare your wages or bonuses with fellow employees.

First of all, why have a policy nobody abides by? Moreover, such a prohibition violates employees' right to compare wages and other benefits in developing their plans to vote for or against a union. This policy is unsound, based on National Labor Relations Board rulings.

Bad policy: In the event you are called to serve on a jury, let our office manager know and he will attempt to help you get excused:

Not only is this policy illegal in all 50 states, it encourages shirking a civic responsibility. Better to write a policy that allows some paid time off, with limits. Other types of court appearances should be included in the policy.

Bad policy: Any funds you owe the company may be deducted from your wages at our discretion.

This one violates labor laws and would not stand up in court anyway unless you have a written agreement. Also, a separate agreement for each debt (e.g., employee purchases, uniforms, damages, etc.) is advisable.

Bad policy: Women employees who become pregnant must advise us when they intend to stop working and may not remain on the job past the eighth month.

Federal law requires treating pregnancy and related complications the same as any other “illness or disability," both in terms of insurance coverage and time off. If your company is large enough (50 employees), then the Family and Medical Leave Act of 1993 places additional restrictions as to the amount of time off, not only for oneself and childbirth, but also for adoption or caring for a seriously ill relative.

Bad policy: Soliciting for causes of any kind is not permitted without prior management approval.

You must permit solicitation for any cause during non-working time and in non-working areas, even though it occurs on company property such as the lunchroom, parking lot or the locker room, or at break times. This need not include soliciting for a charity, and you might want to permit taking up a collection for flowers for a funeral, hospital visit or selling chances for sporting event pools.

Bad policy: We do not tolerate sexual harassment and will discharge anyone who engages in such activity.

This is OK as far as it goes, but under current Equal Employment Opportunity Commission guidelines, it doesn't go far enough. Also, you may not necessarily want to fire your vice president unless he does this all the time. A more detailed written policy on this topic is strongly advised, including who to notify and a promise you will not retaliate if the complaint turns out to be untrue. It should also cover ethnic/racial harassment as well.

Bad policy: When you terminate employment with us, your group insurance will be canceled, but you have the right to convert your life insurance to a private policy.

This is another bad policy. Under federal law (COBRA) you must notify terminated employees of their right to continue group health insurance coverage with your insurer's group plan at their own expense for a limited period of time, even up to 36 months. This includes employees' spouses if legally separated or divorced, and it also includes dependents such as children who may no longer be eligible. Best to check with your insurer on this important policy, and put it in writing.

Bad policy: If two employees marry or enter into a live-in relationship, we reserve the right to dismiss one of the employees.

First, don't ever reserve a right you already have under the "at-will principle." Second, don't fall in this pit. The EEOC and some courts have decided this is sexual discrimination. Better to state that the two may not work together in the same department. In writing this policy, you might also think about a policy on hiring relatives. Also, what if an employee's spouse goes to work for a competitor? (And the way this is written above, what if the two people are of the same sex?)

Bad policy: Your wages and your job performance will be reviewed periodically.

Doesn't go far enough. It should state that reviews will be conducted either annually or at the time of each individual employee’s anniversary date. Don't make employees ask for a raise. It is bad policy, because some people would rather quit than ask.

Remember, having policies that are not written is like steering a ship or fighting a battle without a plan. Sound policies make the difference.

Edgar S. Ellman is a consultant endorsed by the Specialty Tools and Fasteners Distributors Association who writes employee policy handbooks. His services have been retained by the National Association of Wholesaler-Distributors and many of its affiliated trade associations. For a free checklist of 56 employee policies, contact him at 300 N. State St., Chicago, IL 60610, or FAX .

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