HRM Discipline – Demotions and Separations

Discipline is generally administered when an employee violates company policy or falls short of work expectations, and managers must act to remedy the situation. Discipline usually progresses through a series of steps – warning, reprimand probation, suspension, disciplinary transfer, demotion and discharge until the problem is solved or eliminated. Some ineffective managers may be asked to go for retraining or development, others may be promoted to a position with a more impressive title but less responsibility.

If demotion or transfer is to feasible seperation is usually better than letting a poor performer stay on the job. No matter how agonizing the separation decision may be the logic of human resource planning frequently requires that it be made. (Interestingly, a surprising number of poor performers at one firm become solid successes at another.

Union Carbide has approached discipline in an alternative fashion through what is called ‘positive discipline’. When problems arise at work, the supervisor confronts the employee. Although subsequent incidents are met with increasing severity, punishment is not the initial response. The first time an incident occurs, for example, an employee may be required to take a day’s leave (with pay) to think about what happened. At the same time, positive discipline encourages recognitions of good performance by employees.

As we have already discussed, the accelerated trend toward restructuring in today’s turbulent environment of increased competition has contributed to a growing rate of separations. As a result, some companies provide outplacement services to help separated employees find new positions.

Duracell, for example worked closely with outplacement consultants Pauline Hyde associates (PHA) when it closed its factory in Crawley, England. Even before the announcement of the closing PHA quietly contacted 5,000 companies about job opportunities, resulting in the posting of 100 unadvertised vacancies potentially available for Duracell workers. Then, immediately after the news of the closing was delivered, PHA counselors began meeting with employees on-site. Of the 300 workers, 150 were out of a job immediately with three months’ severance pay. Employees registered at the job shop, which was available to them whenever they needed it. The job shop had a firm orientation toward achievement, with an average placement rate of two people a day. News about job successes was posted on bulletin boards to generate optimism among the employees still working. In the end, 92 percent of those laid off found new positions through the out placement effort.

Rhino Foods, a $5 million specialty dessert maker in Burlington, Vermont, chose to avoid layoffs altogether by contracting out idle workers temporarily to other local businesses. Employee collected the salary the other company normally paid for the same work or, if the other company normally paid less than what the worker earned at Rhino, Rhino paid the difference. The costs that Rhino incurred were not insignificant, but Rhino management believed they amounted to less than layoffs would have cost. In addition, many employees acquired new ideas from the temporary employers such as one worker who returned from Ben and Jerry’s with suggestions for rotating breaks for production line employees.

It has become increasingly important for managers to establish and follow to the letter a policy on termination. For many years, it was accepted doctrine that managers could at their own discretion. Through legislative and judicial action however, employees have won an increasing number of complex rights. As a result, more and more companies are finding themselves answering charges of ‘wrongful termination’ in courts that seem to view jobs as a form of legal contract or property with roughly comparable rights. Judgments of wrongful termination change the doctrine of ‘at-will’ employment used in many jurisdictions.

To handle disputes about discipline and document their resolution, formal complaint procedures are common. At Federal Express, the discipline procedure includes formal grievance review process called the Federal Express Guaranteed Fair Treatment Procedure (GFTP). It provides for up to three levels of review: management review, officer review and executive review. Employees not satisfied with results of review at one level may resubmit the complaint to the next level. At each stage, both the complaint and the response must be timely and in writing. —