Don't want to deal with paperwork, emails, and red tape? Too bad. You are placing your company at greater risk if you don't keep some sort of paper trail during the course of business. When dealing with people, it is crucial to document as much as possible.
What's the problem?
As an employer you are required to act in good faith, be fair to all, hold employees accountable, follow all governing regulations, reduce risk, reduce costs, and make a profit. That is a difficult juggling act — even more so for a small business with limited resources.
This doesn't mean printing and filing hard copies of everything. You can email, get signatures, scan, and file electronically. The point is that certain issues, incidents, accidents, complaints, conversations, coaching sessions, policies, and termination circumstances need to be in writing.
Five reasons you must document
If it is not documented, it didn't happen. Promises, conversations, problems, and incidents must be documented to prove they actually happened.
No paper trail means no way to hold employees accountable. Goals and expectations must be documented too.
No proof during a legal issue. Running on verbal agreements leaves employees free to claim inequality or discrimination, with the burden on you to prove good faith.
You will always be liable for reemployment assistance. Proper documentation proves a termination was for gross misconduct, protecting your unemployment insurance rate.
Audits will be a nightmare. Whichever agency is auditing, they want specific documentation — and fines rack up quickly.
When in doubt, document
Not everything requires documentation, but use good judgment. Incident reports, accident reports, safety manuals, employee handbooks, performance evaluations, contracts, and compensation agreements are inevitable in any business.
A business may be small and young and still need these documents. People issues happen to every business larger than one person. It is best to be prepared before there is a problem.