How Zero Tolerance Policies Can Turn Into a Management Nightmare

I have dealt with zero-tolerance programs often, and they typically say something both profound and dramatic: We will tolerate no misconduct, and offenders will be dealt with severely.

It sounds great and is not an unwise position to take, if you are willing to back it up. These programs have two major problems — uniform enforcement and the need for additional supporting resources — and they can be the source of much anguish.

I was once asked to review the new code of conduct for one of the package delivery companies. It was very well written and impressive, but it said something that caught my eye. It said, roughly, “Any violation of law will be grounds for immediate dismissal.”

Very impressive, but fatally flawed.

I had seen this company’s trucks in any number of major cities and had observed that, to make their deliveries anywhere near on time, they had to park in unauthorized areas and zones. It was not unusual for a single truck to pick up six or more parking tickets in a day. I mentioned this to the client. I do not know what it did with this sentence, but this kind of position can create problems, since there may be no realistic way to uniformly enforce it.

If a company adopts a zero-tolerance policy and fails to enforce it uniformly and to monitor it adequately, it leaves employees to guess what else the company is willing to tolerate. That is not a good situation.

The “uniformity” issue is often the topic of wrongful-discharge lawsuits.

There is an all-too-human temptation to tailor sanctions to fit the nature and history of the employee. Thus, if a long-time employee who is a “nice guy” commits infraction A, that person may get a lighter penalty than an employee with less tenure who is unpopular.

Such disparities give lawyers plenty to work with should the sanctioned employee decide to sue, because there is a difference between policy and practice — the rule book says one thing, but the corporation may have done another. Therein lies the risk.

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So, too, with staffing issues. I once had another client with a zero-tolerance policy, and all possible violations were referred to internal audit. This function already was tasked with executing an annual audit plan and also had to deal with a swarm of potential zero-tolerance violations.

Accordingly, the staff were flying around the world frequently and wearing themselves and the travel budget out. Their intentions were good, but under the circumstances they did not really have a chance to look at any particular allegation in depth. They were more likely to give each charge a quick look and then move on to the next one.

The moral of the story is this: Zero tolerance is fine, if you are prepared to uniformly enforce it and if you are willing to devote the resources to fully investigate possible violations.

To do otherwise creates unintended risk, since employees are unsure of what exactly you mean and how serious you are about your message.

Excerpted from Rethinking Risk: How Companies Sabotage Themselves and What They Must Do Differently by Joseph W. Koletar. Copyright © 2010 Joseph W. Koletar. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved.

Joseph W. Koletar served as Executive Director, Principal, and Director in the Fraud and Investigations practices of Ernst & Young and Deloitte & Touche. Prior to that, he had a long career with the FBI, including serving as Section Chief in the Criminal Investigation Division.


2 Comments on “How Zero Tolerance Policies Can Turn Into a Management Nightmare

  1. This is so aptly timed as we're currently revising our internet/email use policy, and in discussions yesterday it became apparent that a seperate code of conduct policy (currently residing in our personnel policy – which as we know no one reads) is needed.

    I totally agree that if you're going to put it in a policy, make sure that you have 100% buy-in on enforcing it.

    We don't want to run into a culture of 'do as I say, not as I do'.

  2. I agree but a good zero tolerance policy should follow some kind of offer to help. Employee Assistance Programs (EAPs) do just that and are very effective when tied to the policy. For example when someone tests positive for substance abuse, a mandated referral to EAP for evaluation, referral and follow up monitoring for up to 2 years increases the likelihood of a positive outcome and retention of a good employee. Even if the person doesn't stay clean, the company has all the evidence that they have tried to help and provided the individual with every opportunity to get better so it can take whatever “next steps” are needed. Its a no-lose situation for everyone.

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