Indian Institute of Management Indore

Post Graduation Programme in Management

Written Analysis & Communication

Your Star Salesperson Lied. Should He Get A Second Chance?

By Group 5, Section A

Name Of Group Member Roll Number

Charan V 2020PGP108

D Sai Karthik 2020PGP114

Divya Puri 2020PGP143

Esha K Sheth 2020PGP146

Evangeline Sophia 2020PGP147

Gokul Babu P S 2020PGP155

Tanishq Chandra 2020PGP495

Nishka Gulati 2020PGP158

Innamuri Yuvasri 2020PGP171

Letter Of Transmittal
Respected Ma’am,

We hereby submit the report on an HBR case highlighting the pros and cons of a
zero-tolerance policy. The report aims to analyze the situation and the different
solutions possible for the identified problem. Based on the analysis done by the
team, we have provided recommendations that would be the best possible solution
to the problem.

We would also like to declare that we have adhered to all principles of academic
honesty and integrity and have not misrepresented or fabricated or falsified any
idea/data/fact/source in our submission.

Looking forward to your views on our analysis.

Thanking you,
Group 5
Section A
IIM Indore

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 Executive Summary

The report analyses the situation in Novacib labs where there has been an ethical breach
by a star performer. The company has a zero-tolerance for ethical violations. However,
losing their top sales representative would lead to a considerable loss in the business and
the associated customer relations. Considering the moral, ethical, and financial
repercussions, Siddhant should not fire Uday. Instead, Uday should be reprimanded for
the ethical breach by placing him on a probation period of 2 months wherein his work
will be monitored regularly. This will serve as an example for other employees and
ensure that profitability remains unaffected.

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 Table of Contents

Title Page No.

Situation Analysis 5
Problem Statement 5
Generating Options or Alternatives 5
Criteria 6
Evaluation of Options 6
Recommendations 7
Action Plan and Implementation 7
Contingency Plan 8

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 Situation Analysis

Siddhant Kapoor joined Novacib Labs five years back as the CEO and was successful in
growing the company by positioning it as ‘the ethical pharmaceutical-marketing
company’. He professed ‘Health with Integrity’, and ethics formed a core value of the
organization. All employees were made to undergo training as the company had a zero-
tolerance policy towards ethical violations.

Uday Madhav, a star sales employee of the firm, was found to have intentionally falsified
information about his customer calls. On being confronted, he accepted his mistake and
asked for a second chance, assuring Siddhant that this would not be repeated. He had
recently become a parent and felt pressure due to the increased responsibilities as he did
not want to disappoint anyone by not meeting his targets. Uday was also a star performer
with a significant contribution to the revenues and long-standing customer relationships
and exceeded the ambitious sales targets by 10-20% consistently.

The current situation boils down to a trade-off between enforcing the core company
values or losing a star employee. Losing Uday would lead to a potential loss of a big
chunk of the business and customer relations that he brought in and managed and it
would be hard to replace him as well.

Problem Statement

What should Siddhant Kapoor, the CEO, decide to do in this situation?

Options

Option 1 Option 2 Option 3

Prioritize the company Empathize with his To minimize the trade-off

ethics and the zero-
tolerance policy and fire
Uday for breaking them.
situation as a new parent, between the business and
consider his high- the ethical standpoint,
performance standards and reprimand him by placing
let him off with just a him on probation.
warning and no action
taken.

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 Criteria

The criteria for evaluating the three options are:

1. Effect on Profitability of the company:

- $250,000 loss a year and the customer relations associated with them.
2. Ethical Standards of the company:
- Adherence to the zero tolerance policy on violation of ethical code and
possible impact if such incidents get leaked outside.
3. Effects on fellow employees :
- Employee morale is affected due to loss of faith in the aspect of
organizational support on moral grounds.
- However, forgiving him can send a wrong message to others that violations
are not punished.
4. Moral Grounds:
- Firing him will lead to the financial burden of his family, which is not right
on moral grounds.

Evaluation of Options

Option 1: Adhere to the zero-tolerance policy and fire Uday.

Pros
- Will uphold the core value that the company preaches.
- Will set an example for other employees on the importance of compliance with
ethical code.
Cons
- Uday is a new father. Losing the job will lead to financial hardships for his family.
This will not look morally good for the company.
- Might affect the morale of the employees close to him.
- Firing him will have financial repercussions for the company.

Option 2: Empathize with his situation and let him off with just a warning.

Pros
- Will help maintain profits as he was a star performer.
- Employees would feel happy that the organization has supported him in such a
situation and will boost their morale.

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 Cons
- The company will lose reputation for violating its own ethical code in case this
information becomes public.

Option 3: To minimize the trade-off between the business and the ethical
standpoint, reprimand him by placing him on probation

Pros
- No sudden loss of profitability and business relations are maintained for the time
being
- Core values of the company are reinforced as employees will understand that
violation of ethical code can have repercussions
- Will boost employee morale as organizational support to personal life is portrayed
in this move.
Cons
- Profits will take a hit for some time as Uday will not perform to his best abilities
until the end of probation because he will be given a reduced role.

Recommendations

Siddhant should not fire Uday. He should place Uday on a probation period of 2 months
and get his reports and work monitored regularly. This will serve as an example for other
employees and ensure that profitability is unaffected.

Action Plan and Implementation

1. Place Uday on probation with a warning that all his actions and reports will be
monitored henceforth.
2. Remove him from the on-ground part of the work, giving him the backend part of
the work, like contacting the clients over the phone. This might help him spend
time on his duties as a father too.
3. He will not be made a part of the on-ground team in the near future without proper
verification of his performances thereon and will miss out on the related perks too.
4. A team of new hires would be assigned under him as mentees to handle the
fieldwork and client interaction part.

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 Contingency Plan

The recommended plan can fail in broadly two ways:

1. Uday might not be happy with the conditions, like his removal from on-ground
work, and might eventually quit the company. The plan, in this case, is to
familiarize the mentee placed under Uday with his clients and have him take over
these clients.

2. Uday works satisfactorily during his probation period and goes back to doing
groundwork in his area. If we find some irregularities again, we have to fire him
instantly to make a strong impression and deter any such future occurrences in the
company. In this case, we can assign the mentees back to this area to maintain this
extensive client base.