Few people realize how employee policy manuals, usually given to you on your first day and then mostly forgotten, shape an organization’s culture and thereby its fundamental performance.

To give you a reference point, one company I worked for had an employee manual of 40+ pages. Every section highlighted “Compliance Is Essential” in bold, with “Required to Conform” sprinkled liberally throughout the document. The manual ended with a meaty discussion of the punitive measures that would happen if someone deviated from the policies. And this was a company considered very innovative in many ways.

The other extreme is Zaarly, a San Francisco-based startup. Its employee handbook, posted online for even non-employees to see, directly addresses culture. The “Rules for Work” section begins with “We don’t have these.” And in a style prevalent throughout the document, it adds that “If you want to coast, we recommend you apply for a job at Craigslist.” Included are some good thoughts on teams, work, and communication—but no rules.

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