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16

Managing Employee
Discipline

McGraw-Hill/Irwin
Human Resource Management, 10/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
16-3
Introduction
Dealing with difficult or misbehaving employees is a
time-consuming, worrisome aspect of the HRM job
Most arbitration cases involve disciplinary matters

These tasks increase the complexity of discipline and

termination cases:
Assessing credibility
Quelling emotions
Determining the seriousness of behaviors
16-4
Introduction
Examples of misbehavior that require action:
Arson
Bullying
Discrimination
Disruptive behavior
Kickbacks
Lying
Privacy violation
Theft
Violence
16-5
Introduction
An employee’s attitude toward work is a crucial
factor in productivity or performance
Discipline may play an important part in this attitude

The kind of discipline system used is related to the

organization
Formal in larger organizations, especially those that
are unionized
Informal in small organizations
16-6
Introduction
Generally, an employee’s manager is the person
primarily involved in disciplining employees
HR specialists may become involved as advisors
The HR manager sometimes serves as a second step
in the investigation and appeal of a disciplinary case
When a union is involved, the HR manager may
provide advice regarding the interpretation of the
contract
16-7
Introduction
When dealing with difficult employees, HR
managers must:
Diagnose internal and external environmental factors
Prescribe and implement remedial actions
Evaluate the effectiveness of their decisions

Throughout this process, employees have rights

protected by federal and state laws
An employee may not be disciplined or terminated in
a way that violates discrimination laws
Some states allow employers to terminate employees
for almost any reason; others require just cause
16-8
Categories of Difficult Employees
Employees whose behavior is “difficult” can be
classified as those:
Whose quality or quantity of work is unsatisfactory
Whose personal problems off the job affect their
productivity on the job
Who violate laws while on the job
Who consistently break company rules and do not
respond to supervisory reactions
16-9
Categories of Difficult Employees
Possiblecauses for deficient behavior:
Problems of intelligence and job knowledge
Emotional problems
Motivational problems
Physical problems
Family problems
Problems caused by work groups
Problems originating in company policies
Problems stemming from society and its values
Problems from the work context and the work itself
16-10
Categories of Difficult Employees
Deficient behavior can result from the:
Behavior of the employee alone
Behavior of the employer alone
Interaction of the employee and the employer

Frequently, difficult behavior is caused by personal

and employment conditions that feed one another
16-11
Ineffective Employees
Employees whose poor performance is due to factors
directly related to work are the easiest to work with
Three questions help analyze the problem:
What is the discrepancy?
What is important?
Is it a deficiency in skills?

If there is a deficiency in skills, it must be corrected

If the problem is not related to skills:
Remove obstacles
Create a more positive motivational climate
Bring about some other type of job change
16-12
Ineffective Employees
In summary, ineffective performance may be the
result of:
Skills
The job
The motivational climate
16-13
Alcohol and Substance Abuse
Prevalence and cost:
Substance abuse affects about
12% of the workforce
It costs over $200 billion per
year in lost productivity and
related expenses
It is a leading cause of workplace
violence
16-14
Alcohol and Substance Abuse
Problem drinkers:
Take 2.5 times more absences of eight days or more
Receive 3 times as much sick leave and accident
benefits
Drug abusers:
Are one-third less productive
Have 3.5 times more workplace accidents
Make 5 times as many workers’ compensation claims
16-15
Alcohol Testing
Testing for alcohol use is increasingly popular
Only 25% of workers consider a drug test an invasion
of privacy
About 28.4% of U.S. workplaces test for alcohol
abuse
The Omnibus Transportation Employee Testing Act
of 1991 mandates alcohol and drug testing for:
Safety-sensitive employees in the aviation, motor
carrier, railroad, and mass transit industries
16-16
Alcohol Testing
Alcohol testing is considered a medical test under the
Americans with Disabilities Act (ADA)
This prevents employers from giving alcohol tests
prior to making a conditional job offer
However, it does not override FHWA and DOT
regulations that require testing
16-17
Drug Testing
Drug testing is conducted in over 65% of the largest
U.S. workplaces
Both applicants and employees may be tested:
For cause
Randomly
Following rehabilitation
About 90% of drug tests use urine samples
Positive drug tests decreased from 18.1% in 1987
to 5% in 1997
16-18
Drug Testing
The ADA does not consider a current illegal drug
user a “qualified individual with a disability”
Nor does it consider illegal drug tests medical tests
Thus, employers can test applicants and employees

State laws can also regulate employee drug testing

California’s constitutional privacy protection limits
the use of random drug tests
Public sector employees are protected by the Fourth
Amendment to the U.S. Constitution
16-19
Employee Assistance Programs (EAPs)
Employee assistance programs began around 1950
“Constructive confrontation” became the norm
The employee was told “correct the problem or
leave”
EAPs are now available to over half of the U.S.
workforce
The new philosophy: the firm has no right to interfere
with the private lives of its workers
However, it does have the right to impose standards
of behavior and performance at work
16-20
Employee Assistance Programs (EAPs)
EAPs are not confined to substance abuse
Emotional problems
Financial difficulties
AIDS
Elder care
Other problems that impair
performance
16-21
Employee Assistance Programs (EAPs)
Most EAPs share these characteristics:
Employees needing assistance are identified and
referred to the program
An employee is introduced into the program, and
his/her problem evaluated
The employee receives counseling and/or a referral
for treatment
Employees receive professional diagnosis and
treatment, usually through an outside agency
16-22
Employee Assistance Programs (EAPs)
The effectiveness of EAPs is still debated, but
organizations have had favorable results
Boeing saved $2 million in decreased medical claims
and had a 29% reduction in absenteeism
Southern Pacific Railroad reported a 71% decrease
in injuries
McDonnell Douglas reported $6 million in savings

Managers should only identify the performance or

behavioral decline of employees
Do not diagnose problems or provide counseling
16-23
Theft, Fraud, and Other Illegal Acts
Security directors say employee
theft is the greatest security
threat to organizations
It costs organizations
over $600 billion annually
HR managers utilize discipline, termination, and
rehabilitation to address dishonesty problems
Proactive problem recognition and conflict
confrontation are being increasingly adopted
16-24
Theft, Fraud, and Other Illegal Acts
Responsibility for crime prevention is also given to
HR departments, which use such tools as:
Security programs
Pre-employment screening
Badge systems
Destruction of sensitive documents
Escort services for visitors
Centralized processes
Redundancy
16-25
Theft, Fraud, and Other Illegal Acts
The Employee Polygraph Protection Act of 1988:
Prohibits the use of polygraph tests to gauge the
honesty of current and prospective employees
Many organizations now use written “integrity tests”

Integrity tests predict dysfunctional employee

behaviors, including theft, moderately well
Integrity tests do not adversely impact groups
protected by EEO laws
16-26
Rule Violators
Difficult employees in this category consistently
violate company rules
Particularly difficult is workplace violence
Homicide is a leading causes of workplace deaths
Each year, about 2 million employees are
physically attacked
More than 6 million receive threats
16 million are the target of some form of
harassment
16-27
Rule Violators
The Post Office developed a six-strategy program
to prevent violence:
Selection
Security
Policy
Climate
Employee support
Separation
16-28
Rule Violators
There is confusion among those measuring
workplace violence and developing corrective steps
Not all violence is reported
Statistics don’t normally include off-duty employees
or non-employees (customers) who are victimized in
a work setting
In about 90% of homicides and 68% of assaults,
customers or strangers are the perpetrators
Identifying violence-prone people may be beyond
the skill of even the best trained managers
16-29
Rule Violators
Organizations are implementing a variety of
programs to combat workplace violence:
Zero-tolerance policies
Crisis management teams
Preselection screening tools
Employee assistance programs
16-30
Violence Warning Signs
Difficulty accepting authority/criticism
Holds grudges
Sabotages company property and/or equipment
Physical/verbal intimidation
Unwanted romantic interest/sexual harassment
Argumentative/uncooperative

History of interpersonal conflict

Has been fired or laid off, or soon will be
Unstable/dysfunctional family
Decreased social connectedness/support
16-31
Violence Warning Signs
Extremist opinions and attitudes
Intrigued by previous workplace violence incidents
Needed help in past but did not receive it
Exhibit paranoid behavior and/or depression
Has difficulty controlling temper
Sense of entitlement
Emotionally injured
Reoccupied with weapons or brings them to work
Substance abuse
Obsession with a particular person
16-32
Rule Violators
Failing to take reasonable steps to prevent
workplace violence can create legal liability
Preventable violence can result in OSHA violations
or state workers’ compensation claims
Some states also recognize “negligent hiring and
retention” causes of action
A legal dilemma may exist when an employee with a
psychiatric disorder poses a risk of violence:
A company must comply with the ADA while also
maintaining a safe workplace
16-33
The Discipline Process
A model of the discipline process:
Insert Exhibit 16-4 here
16-34
Approaches to Discipline

Discipline can be applied in various ways

A negative approach emphasizes the punitive effects
of undesirable behavior
A positive approach emphasizes what can be done
to prevent the undesirable behavior from recurring
16-35
The Hot Stove Rule
This approach to discipline is discussed in terms of
what happens when a person touches a hot stove
Warning system
Immediate burn
Consistency
Impersonality

Is every employee equal?

If the hot stove rule is followed to the letter, it fails
to recognize individual and situational differences
16-36
Progressive Discipline

A sequence of penalties is administered, each more

severe than the previous
It is important to formally record what the policy is
and when and what action was taken
The courts are especially sensitive to the quality
of the records kept
16-37
Progressive Discipline
These documentation and rehabilitation steps
are recommended:
Identify the problem and explain how the employee’s
behavior detrimentally affected the organization
Provide a clear warning and explain the consequences
of failing to make the necessary behavioral changes
Document progressive disciplinary actions to prove
the employee’s failure to make changes
Demonstrate that disciplinary actions were
consistently applied to others in similar circumstances
16-38
Positive Discipline
Two basic problems with hot stove rules and
progressive discipline:
They focus on past behavior
Employees who are disciplined in a punitive way will
not build commitment into their jobs or feel better
about the job or the company
Advocates of a positive discipline approach view it as
future-oriented
Working with employees to solve problems so that
they do not occur again
16-39
Positive Discipline
General Electric uses a positive discipline approach
There are written reminders, but no warnings
A “decision-making leave” is the final disciplinary
step, rather than suspension or termination
If the employee, after the leave, fails to commit to the
rules and policies of the firm, he/she is discharged
A 12-phase communication program explains the
program and its features to employees
In the first two years, the number of formal
disciplinary steps taken dropped significantly
16-40
Positive Discipline
Comments from HR managers surveyed about the
effectiveness of positive discipline were favorable
Positive discipline was fairly successful in obtaining
either behavioral compliance or voluntary separation
Decision-making leave was ineffective for poor
attendance problems; unpaid leave works better
The positive discipline approach recognizes that
people make mistakes
It de-emphasizes punitive action, yet still uses
discharge as the most punishing consequence
16-41
The Disciplinary Interview
Managers must sometimes tell an employee that
his/her behavior or job performance is below par
Guidelines for a constructive discussion:
Root out the causes
Analyze the reasons for poor performance
Prepare for the disciplinary interview
Conduct the interview with care and
professionalism
Issue the discipline
Don’t expect to win a popularity contest
16-42
The Disciplinary Interview
Possible causes for poor performance:
Lack of skill
Lack of training
Low effort
Circumstances beyond the employee’s control
16-43
The Disciplinary Interview
Interview recommendations:
Keep it private
Criticize selectively
Let the employee speak
Take one point at a time
Attack the problem,
not the person
16-44
The Disciplinary Interview
When issuing the discipline:
Don’t make a job of disciplining the employee
Prescribe the disciplinary steps in specific terms and
with a specific timetable
Don’t end the interview until the employee
understands the discipline and what is expected
Assure the employee that future performance will be
judged without considering past problems
16-45
Legal Challenges
Each year, U.S. employers in the private sector fire
about 3 million employees for non-economic reasons
Termination has many costs, including legal
challenges
The average jury award for wrongful discharge
cases is $602,000
The average defense attorney’s fee exceeds
$125,000 per case
16-46
Employment at Will
Employment at will originated in the 19th century
An employment contract is a private matter between
free agents
An employee is hired for an indefinite duration in the
absence of a written contract
Either the employer or the employee may end the
employment relationship for any reason, at any time
16-47
Employment at Will
Federal and state laws narrowed the employment-at-
will concept
EEO statutes prohibit organizations from terminating
employees for discriminatory reasons
Three exceptions established by state courts:
The existence of an implied contract
Covenant of good faith and fair dealing
Violation of public policy
16-48
Public Policy
This exception argues that an employer cannot fire
an employee for reasons that violate public policy
Asserting a statutory right
Refusing to commit an illegal act
Refusing to violate professional codes of ethics

In some states, refusing to commit an illegal act for

which there are criminal sanctions is the only public
policy exception recognized
16-49
Implied Contract
States recognizing implied contract actions do so to
uphold promises made by employers to employees
Courts have found implied promises of job tenure
for employees with satisfactory performance in:
Employee handbooks
Personnel manuals
Oral statements than an employee would not be
discharged without just cause
16-50
Implied Contract
In Pugh v. See Candies, Inc., the California Court
of Appeals found an implied contract based upon:
The plaintiff’s 32-year duration of employment
His promotions and commendations
Assurances he received
The employer’s personnel policies

Other states only recognize implied contracts based

upon written statements
This includes those in employee handbooks
16-51
Good Faith and Fair Dealing
A small group of states hold that employers must
deal with employees fairly and in good faith
States such as Alaska allow plaintiffs to sue in tort
as well as in contract
More often, states restrict this exception to situations
in which employees allege denial of earned benefits
An employer’s best protection is to include an
“at will” employment statement in:
The application form
The employee handbook
Job offer letters
16-52
Alternative Dispute Resolution
Alternative dispute resolution (ADR) means using
methods other than litigation to resolve a dispute
ADR became formally institutionalized in the U.S.
in 1922
Most unionized contracts contain some form of
binding dispute resolution
16-53
ADR Advantages and Methods
ADR is less time consuming, less expensive, and
more confidential than traditional litigation
The non-adversarial nature of ADR makes it easier
for disputants to work together in the future
The most common ADR methods used today:
Mediation
Arbitration The American Arbitration
Association handles over
Summary jury trial
230,000 cases each year
Minitrial
16-54
ADR Programs in Organizations
Companies are increasingly turning to mandatory
binding arbitration, the legality of which is
undecided
Alexander v. Garner-Denver Co.: the court held that
a union could not waive an employee’s statutory right
by including an agreement to arbitrate Title VII
claims in its collective bargaining agreement
Gilmer vs. Interstate/Johnson Lane Corp.: the court
upheld mandatory predispute agreements to arbitrate
age discrimination claims under the ADA
16-55
ADR Programs in Organizations
Lower courts have subsequently addressed the issue
of defining “fair” agreements
Shankle v. B-G Maintenance Management of
Colorado, Inc.: the court ruled that a mandatory
arbitration agreement containing a fee-splitting
provision was unenforceable
Courts also found that mandatory arbitration is
unfair when employers:
Control lists of available arbitrators
Fail to provide employees with arbitration rules and
procedures
16-56

Minimum fairness requirements for mandatory

arbitration agreements:
Use arbitrators with labor/employment expertise
Make fair discovery methods available for employees
Employers should be responsible for costs
Employees should have a right to legal representation
during arbitration proceedings
Written opinions must be provided by arbitrators
Arbitrators’ decisions should be subject to judicial
review