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Well-regarded worker’s mistake cost company millions

I’m the human resource manager of a medium-sized factory. Normandy (not his real name) is a consistent, hardworking person who has been in my department for the past seven years. He received five employee awards in the last five years and became a hall of famer last year. He was due for promotion to a supervisory post until he committed a grave mistake that cost the company millions of pesos. How do we manage his case? — Rainbow Connection.

My short answer is — it’s a judgment call. But first, you must decide based on Normandy’s total personal circumstances. Be prudent. Don’t let this single incident color your judgment regardless of the cost. Most people don’t deliberately cause damage. Therefore, the millions in losses that your company incurred could be the result of an accident that was not necessarily attributable to Normandy.

It’s human nature to do good. The philosopher Jean-Jacques Rousseau (1712-1778) believed “that human nature is essentially good,” which I consider to be the basis for the legal presumption of innocence until proven otherwise.

Normandy has an excellent work reputation. It’s unlikely that he made that mistake deliberately. It could be the result of a bad system perpetuated by management and followed by the workers, including Normandy, who has no authority to change it to something better.

He may have reported the issue and made suggestions to correct the situation but his boss could have dragged his feet in making a decision.

It could be the result of a complex procedure that was followed to the letter. Things like this can happen, especially when an organization does not have a pokayoke or an error-proofing system that minimizes or eliminates mistakes.

Normandy may also have been given excessive work assignments beyond his capacity to accomplish. If not, he could have been burdened with unreasonably tight deadlines. Or, he may have personal or family issues that distracted him from his tasks. He may have a sick spouse or child. He may be having marital problems or worries about his financial obligations.

FIVE SOLUTIONSAbove all, think of all the good things that Normandy has done for your organization. Are they enough for your management to ignore the losses? Why or why not? Calculate the actual and potential losses and weigh them against what you can do with him. Quantify the damage in absolute terms so that you can have an accurate description of what you’re trying to address. Estimates could give you a wrong impression about the losses.

As soon as you’ve established all the facts and figures, explore the following steps:

One, review the provisions of your code of conduct or related policies. Find out if there’s anything about negligence. Usually, cases arising out of employee negligence fall into two types: gross negligence (willful recklessness or inattention) or simple negligence (careless mistake). They carry different penalties which may include restitution for damages. This policy should be your guide.

Two, determine the culpability of other workers and their boss. Most of the time, we should not focus on the acts or omissions of one person. The immediate boss must take command responsibility. Jurisprudence has established that as a general rule, employers are given “wide latitude of discretion” in terminating managers who failed to supervise their workers.

Three, observe due process every step of the way. Everything starts with utmost confidentiality and legal objectivity. In this case, both Normandy and his boss must be charged separately with different violations. The boss may be charged with loss of confidence or neglect of duty. The process includes the filing of an incident report, issuance of notice to explain, administrative hearing, management deliberation and issuance of a decision.

Four, allow Normandy to negotiate on the resolution of the case. If the decision is to terminate his employment, agree to a resignation or an honorable exit so that all parties may be spared of any emotional anguish. The same thing can be applied to Normandy’s boss who might be in the best position to recover the damages from.

Last, explore the options for restoring the damage. How could an ordinary worker like Normandy pay back the millions lost by the company? The best thing you can do is to forfeit his unpaid salary and benefits. I have also seen many organizations apply command responsibility to the immediate boss. Department managers can’t wash their hands of this case.

PRECEDENTConsider the fact that your action will establish a precedent. Workers and managers who find themselves in the same situation may use the same arguments in resolving future issues. This is best handled when you properly document the procedure and its results.

Another thing. Performance problems can happen anytime even if the workers and their managers have done an excellent job in the past. There’s no assurance that people with excellent work performance in the past will make mistakes. That’s because work scenarios are constantly changing. Somehow along the way, workers and their management may have misunderstood the requirements.

If you’re in HR, it’s the best time for you to remind people of the company’s expectations.

Bring Rey Elbo’s popular program called Superior Subordinate Supervision to your management team. Or chat him on Facebook, LinkedIn or Twitter or e-mail or via

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