Not infrequently, we begin work with a new client and request to see current employee documentation. And we find there is none.
We go to a particular employee’s personnel file and find that either there is no file, or it’s substantially empty. And that’s often after they’ve been with the firm for many years.
Simply, this can’t ever be so. Every employee starts a personnel history when they’re appointed, and that history grows week by week.
Firms must keep records of every interaction with their employees. Those records will become essential some day and their absence will then materially damage the firm.
This blog gives a framework for record keeping, particularly where this concerns change to the terms and conditions of employment.
Before I start, I’m not advocating here that firms computerise their HR records and rush out to buy a fancy online HR records system. That might be the ultimate solution, but as in all areas of business, systems should first be manual. Manual systems teach managers the benefits that computerisation might bring (if any).
So, we’re talking a folder – physical or digital – in which records are kept spanning back to the beginning of each employee’s life with the firm.
This record starts with the application for their first job with the firm and records their interview and testing. It documents the subsequent offer of employment. That offer should contain an offer letter, a terms and conditions of employment signed by the employee, and a copy of the staff handbook pertaining at the time of offer. That’s the foundation on which everything else builds.
When I say, ‘every interaction’ above, that is literally what I mean. But let me explain.
We’ve already blogged on the essential use of a day-book by all managers. This records every interaction between manager and team member. It records lots more besides, like interaction between manager and customers, and between manager and peers. But it’s the manager-employee relationship that matters here.
Here are some good examples of the sort of day-book notes that a manager might make.
• ‘Talked to Sarah earlier. She seemed a bit down. Need to have a chat with her about how she’s getting on in her new flat.’
• ‘Jo in at 9:52 today. Not like her.’
• ‘Andy says he’s trying to buy a house and wants to talk about how he gets promotion and more pay. Need to make a review meeting with him.’
And then date each and asterisk any requiring further action.
Every so often, relevant private notes of the manager will need to be formalised. It’s then that documents will be filed in each employee’s personnel file.
Many manager-employee discussions will trigger a change to the employee’s terms and conditions of employment. Most of the time all that’s needed is a letter to the employee. A good example is where an employee wants to work from the family holiday home well beyond the catchment area for the firm.
This is a real and complex issue. Many European nationals working for UK firms, and even UK nationals with property abroad, re-positioned themselves abroad and became trapped there during Covid.
Most firms are flexible. But when someone re-positions themselves like this, the firm needs to acknowledge that they’ve done it, and set out any expectations and conditions. And a letter is all that’s needed to temporarily modify the terms and conditions of employment.
That’s an example of a rather big change. Smaller changes abound for all employees. It could be a pay rise. Or agreement to pay for a training course. Or to note an illness (using Fit Notes perhaps) and notes of a return-to-work discussion. All can be done with letters sent to the employee or some similar notes.
Of course, at some point a re-issue of the terms and conditions of employment – the employment contract – will be needed. It’s the manager’s judgement as to when that’s needed, but we’d counsel that it’s the exception, not the rule, in most firms. Generally, a letter will suffice, unless the employee changes job or is promoted with vastly different terms and conditions.
I should point out that letters making change to the employment contract need a certain form – pointing out their importance and that they should be kept by the employee as a record of change.
The point here is that for all employees, information will be added to the personnel file throughout the year. Over an employment of, say, five years the file would be bulging. If it was to be printed, it might be an inch or so think.
It certainly wouldn’t be empty.
So, to the framework.
Managers should use a day-book to note daily interactions with their team members.
Where those interactions have any impact on the employee terms and conditions of employment, they should be formalised in a letter, or other note, to the employee. Where there’s communication from others, such as from other managers or external agencies, this incoming information should also be logged.
Personnel files are simple to keep. Each file is a paper or digital folder. Every piece of ‘paper’ is lodged in date order, or some other order that makes sense. There’s no need for detailed recording or summarising. Just make sure everything’s there. If it’s paper, make sure it’s locked in a fire-proof safe. If it’s digital, on a network accessed store for example, make sure only people who have need are allowed access. And make sure it’s backed up. Loss of this information is catastrophic.
Right now, record keeping might not seem important. But you’ll see, sometime in the future, just how important records can become.