Establishing Key Employee Records

For organizational and legal purposes, you should maintain and update an employment file on each employee.

A file allows you to keep credentials and reviews at your fingertips, and it also

lets you present information to others quickly. Many firms need to share employee data between departments — accounting and human resources, for example — and files are the ideal way to do that. Files also document the mutual understanding between the employee and employer concerning policies, performance expectations, goals, and opportunities.

In today's computer age, many companies choose to keep files electronically or in databases, but plain manila folders still work fine in many cases. Use whatever is most comfortable for you — and will most likely encourage you to keep your employment folders up-to-date.

When organizing your employee folders, try to keep the information in order by date, beginning with the worker's resume and references, along with an employment application. Also, keep the original job description for each new hire, and create room to note any changes in responsibilities over the coming months and years. That will make it easy for both you and the employee to track how the position and skill set required for the position have changed over time. This part of the employment file should also include the date set for the first performance evaluation. Once that takes place, a written review should be added. Keep all such reviews, just in case. You may be called upon someday to justify a firing or a bad review.