I've refrained somewhat from entering this fray. As some of you may
know, in my recent past I work for a human resources and benefits
consulting and outsourcing company. As a matter of course, we handled
personnel files and benefits transaction documents. Most everything was
imaged and the paper copies designated for destruction, as permitted by
contract.

In my experience with a number of clients, I found wide spans in the
manner in which personnel files were managed. Some HR departments had
extraordinarily organized file folders, with designated tabs for each
general category of record within the file. Others were simply
horrendous accretions of paper.

A number of things are clear to me about personnel files:

1) Have a file plan. Be very clear on what goes into the file and where
-- frankly, unless the employee's Master's degree is relevant to their
job, a copy of the degree certificate has no business in the file. I
saw some companies where employees were allowed to send just about
anything in and have it put into the file. If it doesn't impact some
bit of data that is relevant to the employee's identity, pay or
performance, it has no business in the file.

2) Keep medical records separate. That includes doctors notes and
absence requests. 

3) Keep benefits and retirement records separate. Ensure that
retirement files have the relevant information to calculate retirement
benefits without need to go into the personnel file.

4) Keep those I-9 forms out of the personnel file. That is a separate
retention period and the government doesn't need to see the whole
personnel file when they want an I-9 -- besides it is easier to track
who has them and who does not.

5) Have a plan for disciplinary documentation and stick to it. If
discipline letters are to be purged due to collective bargaining
agreements, make sure that is happening.

6) Have a plan for access to the file and stick to it -- and know what
happens if you convert the documents to images.

7) Pull terminated employees' files immediately. Too many companies
never purge the personnel files.

8) Avoid ad hoc file purges of contents. Don't put stuff in the file
unless it has a place there.

9) Deal with employee investigations separately from the personnel
file. When someone is investigated, that file should be maintained in a
secure fashion, apart from the primary personnel file. The outcome of
the investigation should only end up in the personnel file when an
action is required.

In general, I see personnel files as existing primarily to keep a
record of:

Personal information (name, address, emergency contacts)
Employment contracts and employee agreements (along with policy
acknowledgments)
Job history (position description, pay grade, promotions / demotions)
Job performance (performance evaluations)
Actionable discipline and awards (the outcome resulted in the company
doing something)
Pay changes and job changes

Separate files should exist for:

Payroll, payroll taxes and cash incentives (garnishments and elective
payroll deductions should also be part of this)
Benefits (possibly separate files for each benefit plan)
Leaves of absence
Medical
Workers compensation
Investigations
Training
Time keeping
Stock options and incentives
Expatriate (expat) and inpatriate (inpat) documentation
Relocation files (if not part of expat or inpat files)

Much of this information is maintained in databases or by outsourcers,
so a "file", as such, may not be relevant.

Some professions may require licensure records or records relating to
regulated training. Generally, it is a good idea to maintain these
apart from the personnel file. Some professions tend to generate a high
level of customer feedback about an employee (positive and negative).
The company needs to make a determination about how this feedback is to
be maintained. In general, if the customer feedback results in an
action being taken (a reward or a punishment), then the feedback should
be maintained. If the feedback is rarely considered, then it should not
be maintained.

If the files are going to be scanned there needs to be a plan for
ensuring that new documents are added to the electronic file. Unless
there is a compelling legal reason to do so, I would not maintain
imaged paper after it has been scanned. That process needs to be
documented. If there is a chance that certain documents may need to be
purged from the file, then those documents need to be clearly
identified as individual record series and a system needs to be in
place to ensure that they are regularly purged.

When I say that these files need to be "separate", I don't necessarily
mean in different cabinets by record series. There is nothing
inherently wrong with maintaining all the records on an employee in the
same place (just different folders), so long as the space is secure and
the right number of people have access to the space. What you want is
to ensure that no unauthorized people get access to things that they
don't need to see.

And to that end... We had a very major debate about imaging our own
personnel files. What ended up happening is that only two people in the
imaging area were allowed to touch internal documents. One was a team
leader and the other was a supervisor. Both understood the sensitive
nature of the files and understood quite clearly that sharing anything
from the files with any other employee was grounds for termination.
While you may not want a fellow employee handling your files, it is the
nature of the beast that somebody working for the company is going to
have access to that information. They need to understand the
sensitivity and understand very clearly that they will be held
accountable for all breaches. I think it is a very bad idea for a
"temp" to be the person handling these files. Temps tend to have less
incentive to maintain confidentiality and be held accountable for
breaches.




Patrick Cunningham, CRM
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"Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."
Benjamin Franklin, Historical Review of Pennsylvania, 1759

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