Background
Richard is the newly appointed department head of the operations department, whose poor reputation has led senior management to focus on it. He has a reputation for being a demanding, some would say ruthless, manager and the department views his appointment with some trepidation.
On his first day, Richard tells the section heads that he is determined to improve the performance of the department by eliminating the unacceptable number of errors which occur. He says that section heads have a key role in driving the performance of their teams and his department, adding that he is aware of his reputation, which he admits is not undeserved.
A week later Richard sees the section heads again and draws their attention to the weekly errors report which, he tells them, far from showing an improving trend, contains more errors than ever before. He then reads a letter to them, which he intends to send to department staff, stating that if all work is not checked and the failure to do so results in unacceptable errors: “it is highly likely that the individual…will face disciplinary action, which could result in dismissal.” The new regime will be enforced immediately.
The impact of the letter is a sepulchral hush in the office and the working of longer hours by many staff, especially the section heads.
A week later, unprompted by Richard’s ultimatum, the internal audit team carries out a snap audit of the department, as a result of which they identify a number of errors, most of them historic. However Richard’s attention is drawn to one specific item, which is still current and includes entries passed two days previously. An instruction to make automated dividend payments into a client’s account has been set up wrongly,
resulting in a series of duplicated payments being made. Although none of the amounts is more than £25 and a total of about £200 has been wrongly paid, it is the apparent failure of his letter to make any difference which really upsets Richard.
Exasperated that this should have occurred so recently, he asks who should have checked the entries and is told that it is Nadia, a long-serving section head, who has a mixed track record.
The Dilemma
With a copy of his letter and the internal audit findings in his hand, Richard storms into the office of his divisional head. He demands that, following on from his warning, disciplinary action be taken, saying that he expects the divisional head’s support, as crucial in achieving an effective department.
The divisional head is going to a meeting, so tells Richard that he will see him later on. Before doing so, he contemplates a number of key issues that he considers should be addressed before making a decision. It is essential that any action that is contemplated is fair and scrupulously follows the firm’s procedures but, bearing this in mind:
- What sort of culture does the firm want?
- Is zero tolerance acceptable?
- Does this operational failure meet that criterion?
- Do you want people to own up when they have erred?
- If so, how do you incentivise and encourage them to do so?
- Do you want to reward appropriate behaviour? How can you do so in this case?
- How will Richard feel if his divisional head does not support him?
- Should you weigh the materiality of Nadia’s failure against the potential impact on the authority of your new manager?
- If you think disciplinary action is warranted, which may lead to dismissal, what should Nadia have done to avoid being dismissed?
- Where do you draw the line and what message does this send to other colleagues?
Options
Having considered these questions, the divisional head sees that he has a number of potential courses of action, all of which have some merit and he wonders which he should choose. Should he:
- Support Richard in his proposed course of action, to the maximum extent that is permitted within the firm’s employment policies, because he was selected to do a job and failure to support him at this stage will fatally undermine his authority?
- Support Richard in taking action, but ensure that it is proportionate to the actual incident, irrespective of the warning that he gave?
- Suggest that no action should be taken without involving HR, even if that results in losing the shock and awe impact for which Richard clearly hopes?
- Suggest that no action should be taken that may have unintended consequences?
Consideration must be given as to whether taking a hard line will improve or worsen the situation.
The verdict
He should support Richard in taking action, but ensure that it is proportionate to the actual incident, irrespective of the warning that was given.
Further reading