Monday, March 14, 2011

Disciplinary and grievance procedures by R Das Gupta

Disciplinary and grievance procedures

by S R Das Gupta
31 Jan 2001

This article is written specifically for Certified Accounting Technician students preparing for Paper C6 (Managing People). Students are required to answer any four (out of five) questions, each question carrying 25 marks.
This article will focus on disciplinary and grievance procedures in two sections. In the first section, we will cover various aspects of ‘discipline’. The second section will discuss different issues on ‘grievances’.

Section 1


Discipline may be defined as a safe, healthy and orderly working atmosphere created by the employees with appropriate behaviour and proper attitude and who are following all company rules and policies in an efficient manner.

A past question

There was a whole question on ‘discipline’ in the June 1999 sitting which is reproduced in Figure 1. We will make reference to it later in the article to illustrate some of our points.

Disciplinary actions

Normally in any organisation there will be a set of rules that need to be followed by the employees to ensure the smooth running of its business. Such rules will prescribe what may or may not be done by the employees during the course of their employment. All these rules are implemented not only for meeting company objectives but also to ensure a safe working environment for the employees.
It would be an ideal situation if all rules were always properly followed by all employees. In reality, however, the situation may not be so perfect. There may be occasions of non-compliance, instances of abnormal behaviour or existence of attitude problems. Disciplinary actions are then taken to stop recurring non-compliance and improve the situation. In serious cases, disciplinary proceedings may also be necessary to punish an errant employee. In section (a) of Figure 1, 5 marks were allocated for explaining ‘discipline’.

Figure 1
The accounts manager understands the need to motivate employees, but does not understand what is meant by discipline within the employment context. You have been asked to explain.
(a) What do you understand is meant by the term ‘discipline’ in the employment context?
(5 marks)
(b) Provide examples of situations where disciplinary action may be required.
(8 marks)
(c) Describe the steps involved in a formal disciplinary procedure.
(12 marks)

(25 marks)

Consideration for disciplinary actions

Different organisations may have different rules for disciplinary action. Certain employee actions are sure to attract disciplinary proceedings although the level of punishment may differ from organisation to organisation. Severity or seriousness of the infraction is the key factor to decide actual disciplinary action. The more serious the infraction, the more severe the punishment would be. Unless it is a serious offence, the employee’s past performance records would also be taken into consideration before deciding on disciplinary action.
In finalising any disciplinary action, the following key principles must be followed:
·  disciplinary proceedings should be based on facts and not hearsay;
·  affected employees must be given all reasonable opportunity to explain and defend (if necessary) his/her action. Final action can only be taken after such explanation/defence has been given due consideration by the management;
·  no employee should be punished more than the infraction warrants;
·  personal bias against an employee should not be used to influence disciplinary action.

Situations requiring disciplinary actions

To save some time in the examination hall, students should remember some of the incidents that would invariably result in disciplinary actions. Please refer to section (b) of Figure 1, where 8 marks were allocated for providing 8 such examples. It is not possible to compile a comprehensive list of all such actions, however we have listed sixteen instances which may be remembered easily from the acronym:
Sleeping while on duty
Threatening co-workers
Refusing to perform assigned duties
Conviction of criminal offence
Tarnishing company image
Infraction of company policies
Safety procedures ignored
Carrying out illegal/immoral activities in company premises
Irregular attendance
Poor performance
Improper behaviour
Negative attitude

Steps taken in disciplinary action

Some countries may have labour laws stipulating the exact steps to be followed when disciplinary actions are necessary. In the absence of any such legal requirement, organisations are at liberty to develop their own internal policies.
Generally such actions are taken in steps to provide the employee an opportunity to rectify the situation. However, the severity of the offence is the key factor in deciding whether the employee is entitled to such progressive steps or if drastic action is necessary. In more serious cases, management will obviously start proceedings at a higher step commensurate with the offence/non-compliance. As an example, management may decide to immediately discharge an employee found to have stolen company property.
Usually the steps are as follows:
(a) Informal discussion. Direct communication between employee and supervisor to highlight and resolve the issue.
(b) Verbal warning/reprimand. Here the supervisor clearly explains the problem and makes it clear to the employee that more serious disciplinary action will follow if it is not corrected within a specified time. (It is important to note that steps (a) and (b) are not documented in company records.)
(c) Official warning. A written warning is issued to the employee.
(d) Suspension or lay-off. If an official warning does not improve the situation, the employee may be placed on suspension (temporary lay-off) for a specific period, without pay.
(e) Demotion. The employee is downgraded to a lower position usually associated with a reduction in pay.
(f) Discharge. The final action comes in the form of retrenchment when the employee is terminated from the company. (Actions under steps (c) to (f) are appropriately documented and a copy is placed in the employee’s personnel file.)
Students should note that 12 marks were allocated in section (c) of Figure 1 for describing these steps. An accounting supervisor should be fairly familiar with company policy on disciplinary matters. With efficient handling of such matters, the supervisor should not only resolve the issue for the company but also earn respect from the rest of the employees.

Section 2

What is grievance?

Disciplinary proceedings are the result of employees not following rules and regulations or not performing according to standards set by the company. The reverse situation is also possible when an employee feels that he is being treated unfairly or inequitably. His grievances may arise due to many factors such as inappropriate interpretation of rules, unfair treatment, personal grudge, non-recognition of work performance, etc.
Unless the employee’s grievance is addressed from the very beginning, it can be a constant source of worry and anger for the employee which in turn may impact on his work performance. Disgruntled employees may be a source of danger not only to the organisation but also to the other employees in the organisation. Such an employee can also cause nuisance value to the company. Therefore grievances should be addressed and resolved at the earliest opportunity.

Management responsibility

Managers should be extremely sensitive in handling grievance situations. Every case of grievance must be treated as an opportunity to improve the working environment and not viewed as a nuisance created by an employee. A clearly defined grievance policy should exist in every organisation. The policy should be made available to all employees.
The policy should allow the employee complete freedom to air his grievances to different levels of management. It should also provide for a fair hearing with assurance of complete privacy where necessary. No action should be taken against the employee simply based on hearsay or unconfirmed reports.
In summary, a grievance policy should be seen by the employees as a right to express their complaints, unhappiness or disputes. This is also their opportunity to work towards prompt and orderly resolution of such issues.

Key principles

In developing a grievance policy the following considerations must be given:
·  employees must be accorded at all times an open-door policy without any fear;
·  reasonable opportunity must be provided for the employees to adequately express their grievance(s);
·  if desired by the employees, permission should be given to be accompanied by a labour union or other representative;
·  every employee must be given adequate opportunity to pursue his case until a satisfactory resolution is reached;
·  specific time limit must be set for a fair and equitable resolution.

Grievance policy

As a start, the employee should contact his immediate supervisor who should endeavour to amicably resolve the issue. Most grievances can be settled by open, effective and regular communication between the employee and his supervisor. If, unfortunately, the immediate supervisor’s efforts do not satisfy the employee, he should have the right to approach higher levels of management for assistance. Because of the high importance placed on the employee-supervisor relationship to resolve grievances, it is critical that the manager makes his best efforts to first understand and then resolve the complaint. To do this, he must first arrange an interview with the employee. His role in such an interview is usually three-fold:
1 Exploration: to obtain all the details of the complaint with relevant and complete facts and related information.
2 Consideration: to analyse all available information and determine different options available to address the issue;
3 Resolution (response): to arrive at a final decision and communicate same to the employee.
The supervisor’s final resolution should be documented for reference in future actions, if any. If the employee is not satisfied with this resolution and decides to pursue the matter with higher authorities, this documentation would serve a key role in future proceedings.

Figure 2
A grievance occurs when an individual thinks that he or she has been wrongly treated by colleagues or supervisor. An unresolved feeling of grievance often leads to further problems for the organisation. The purpose of a procedure is to resolve the grievance to the satisfaction of all concerned.
(a) Briefly describe what should be in an organisation’s grievance procedure.
(13 marks)
(b) Describe three stages in a grievance interview within an organisation.
(12 marks)

(25 marks)

Reproduced in Figure 2 is a question on grievances from the December 1999 sitting. By reading this article, students should be able to answer both sections (a) and (b) comfortably.
In this question, students were not asked to give examples of “further problems” that unresolved grievances may lead to. It is difficult to compile a comprehensive list of potential problems but the following are some of the key dangers that may seriously DISRUPT normal operations of the organisation:
Divulge sensitive information to competitors and external business associates/destroy company records/damage company properties
Instigate fellow workers to engage in undesirable activities
Spread damaging and/or false rumours against the company
Resort to inappropriate behaviour and/or unacceptable attitude
Use company assets for personal benefits
Purposely slow down business activities
Tamper with safety/security equipment


The impact of employee grievances may have a significant and long-lasting negative impact on the organisation. The impact may be even more severe if it is a collective grievance i.e., several employees share the same concern. To avoid any such problem, the manager must handle all cases of grievances with speed and sensitivity. He should not underestimate the situation until it has been resolved to the complete satisfaction of employee(s) and management.

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