A few years ago while attending a management team meeting; there was much discussion of a recent mistake that occurred. It was a significant mistake. It was a costly mistake. It was one of those mistakes that virtually every manager in attendance was thankful did not occur within their department. Nonetheless, due to the severity and high visibility or the mistake, it was a topic that senior management wished to discuss in the open forum of the entire management team.
I sat next to the manager (and my friend) during the meeting. Although the mistake could be defined as a minor coding error, the mistake ultimately cost the corporation about $150k. After a brief recap of the incident, one of the executives asked if the employee was going to be terminated. Without hesitation, he responded; absolutely not. His quick response took many by surprise (including the executives) especially since the question was probably meant to be rhetorical.
He further clarified stating that if he were to terminate the employee then the incident would truly be a $150k loss to the company. However, by retaining the employee, it becomes an incredibly costly training expense. Not only will neither this employee nor any other make this mistake again after witnessing the enormity of the issue, but the productivity and dedication of this particular employee over the past several years generated far more revenue than the cost of this one mistake. Therefore, to terminate the highly productive employee would compound the damage since it would result in an opportunity cost due to a reduction in departmental productivity.
For management to respond to quickly and in what could be perceived as an over-reaction (considering the employee’s overall performance throughout their employment) could have significant negative implications expanding well beyond that specific department. Employees must be empowered – which can at times result in a mistake. Productivity and efficiencies increase significantly when the employees feel empowered and appreciated. Conversely, productivity and efficiencies suffer when employees work in constant fear of the ramifications of making a mistake. The unfortunate irony is that when an employee is constantly fearful of making a mistake, the probability of them making a mistake actually increases.
This is not to imply that employees should not be held accountable. In this particular case, the employee was held accountable and properly reprimanded. In addition, the entire process was reviewed to ensure additional control points were implemented to protect the company and the individual employees from a similar situation in the future. Therefore, both the company as well as the individual employee grew and improved as a result of this painful situation.
I too grew as a manager through witnessing this event. I witnessed a situation and a manager who rather than take the path of least resistance and simply terminate the employee, stood up and challenged the corporate logic. He held true to his convictions and empowered his people. A lesser manager would not have taken this path. Yet, this manager held true to his values and even with the $150k cost of this mistake proved to be the most productive and profitable manager in the business channel.
Husband, father, coffee connoisseur and lover of all things hockey. At 51 I sometimes wonder have I done enough. I have been married to my best friend for 30 years. She knows all my faults and loves me anyway, As a father of “almost always” perfect boys, I am always surprised at what life has to offer. It is messy, scary, thrilling, and always fun.