Business Case Studies

Effectively Managing Teams: It All Starts with A Contract

Your team is your greatest asset – your business simply can’t function without them. At the same time, your employees can also be your biggest threat.

Without an effective management plan and thorough contracts in place, you’re vulnerable to ex-employees taking your company’s information and customers with them. You’re also left without any way to carry out disciplinary actions, handle sick leave or put staff on track to grow with the business – which leads to a chaotic environment where you’re not in charge, and your employees know it.

To keep things under control and keep productivity levels high, you need the right management strategy, and the right management strategy starts with the right contract.

Under the Employment Rights Act of 1996, you’re required to provide your team with a written statement of their particulars of employment. But how do you draft a contract that maximizes productivity and works for both you and your employees? Here are some tips to help you get started.

Be Clear, Be Consistent

If your employees can’t understand their contract, what’s the point of having it at all?

First and foremost, a good contract should be unambiguous and accessible. And not just for the sake of your team – a clear contract stands to benefit you as well. The clearer the terms, the less likely it is to be misinterpreted or challenged.

You should also be sure to stay true to what you set out in the contract. You shouldn’t list steps for disciplinary action and then not carry them out when the situation arises – this causes a lack of structure and respect in the workplace and sends the message that other clauses can be disregarded too.

Create a Positive Environment

A confused employee is an unhappy employee. Setting clear expectations in your contracts helps keep your team focused and organised. Some of the most important expectations you’ll want to write in your contract are:

  • Schedule Hours: Does your company require employees to work weekends, nights, or holidays? Explain this in your contract to avoid surprises and backlash.
  • Classification: Are your team members full-time employees or contractors? Accurate classification is important to help them fill out their tax forms and get paid properly. Please remember that calling an employee a contractor does not make them a contractor unless they are a contractor. For more information on employment status click here.
  • Time Off: Include detailed information about sick days, holiday allowance, and emergencies. Consider things like the number of holiday days allowed, when that holiday can be taken , whether or not you expect employees to make up for the lost time of unexpected absences, and when a doctor’s note is needed for sick leave.
  • Performance Reviews: Diligent workers will want to progress with your company, and feedback and performance reviews are always appreciated to praise those who help the business grow. Set out clear pathways to promotion and salary raises to keep your staff motivated.

Protect Your Interests

While you want to create a positive environment for your employees, you also want to protect the interests of the company. Including the following items in your contract will help you do just that.

  • Confidentiality Clause: A confidentiality clause prevents employees from sharing sensitive company info with competitors.
  • Post-Termination Requirements: You’ve outlined the termination process, but what happens next? Post-termination requirements can restrict former employees from taking actions that directly harm your company, such as starting a similar business in the same area. These are sometimes referred to as restrictive covenants or post termination restrictions.
  • The Right to Monitor Electronic Communications: Wrongdoing by employees often takes place online and it is important that your contracts of employment give you the right to monitor electronic communications and rely on them in disciplinary proceedings. This can be an agreed term in the contract of employment.

Seek Help from Professionals

Writing up a contract for a small business of less than ten employees may seem like a simple task, but it should be treated with the same seriousness as a contract for a business of 500 employees. In order to do this properly, you might want to enlist the help of a legal professional who has been trained in this area such as Helix Law.

An HR professional, whether in-house or outsourced, can help you better define the role your employees play in your business. By seeking professional help from the start, your company is less likely to encounter major pitfalls down the road.