An employee handbook is a manual that contains an employer's work rules and policies. It can also contain other information that is useful to the employee, such as the business's history, its goals, and its commitment to customer service.
Whether to have a handbook should depend largely on the size of your business. If you have only a handful of employees, the time it would take to assemble a handbook probably won't be worth it. However, you may still want to have some kind of written document to communicate your general work policies to employees - perhaps a one-page document would be sufficient.
If you have 10 or more employees, you might want to put a simple handbook together. Some employers feel that handbooks can pass on valuable information to your employees, such as:
what you expect of them and what they can expect of you
what your business's service policy to customers is
what place your business has in the community and the industry
what makes your business a good place to work