(This is an excerpt from,  Work the System: The Simple Mechanics of Making More and Working Less.)

Several years ago we had problems with two Centratel employees. The first one’s work was very good, but he failed a random drug test. The second one’s work quality was also exceptional, but she violated our computer privacy policy.  Both instances were serious breaches of the company’s written guidelines.

What to do? It crossed our minds that we could sweep these major offenses under the carpet in order to spare unpleasantness and eliminate a time-consuming search for replacements. But we had to ask, if we keep employees who violate policy, wouldn’t this render our policies impotent?

The system solution? We spell out rules, regulations, and guidelines in our Employee Handbook, viewing this collection of policies as a primary system in itself—a giant Working Procedure. (You can find the entire 35,000-word document at centratel.com, under Resources.) All employees are required to understand the company’s policies and, by signing a statement, show that they accept them as a condition of employment.

Per the handbook, these serious violations were cause for employment termination. And that’s what happened. We ended their employment on the spot. There was no arbitrary, manipulative corporate judgment call. We simply followed the “conditions of employment” system that had been set up in advance.

Our system allows management to be completely objective, remaining outside of any emotional or manipulative positioning. The Employee Handbook spells our policies out exactly and explains the ramifications of not following them. These two employees knew they were gambling. They lost their respective rolls of the dice and their departures were simple and clean. Parties on both sides—and our remaining staff—understood why these terminations occurred.

Because we follow policies exactly, all Centratel employees know that a deliberate act of crossing the line will not be met with wishy-washy “don’t let it happen again” platitudes or interminable second chances. After a serious violation, do employees deserve a second chance? Well, actually, no, as a matter of policy they don’t. But because of this intractable position, policy violations seldom arise and we are not often faced with letting someone go.

Employees want rules to be consistent and fair, and in contrast to some conventional corporate wisdom, my partner and I believe that when we let someone go for assertively violating clear-cut policy, our remaining employees feel more secure in their jobs, not less. Yes, we lost two valuable people, but the losses were outweighed by the positive, long-term effects on the remaining rule-abiding staff who always understand where things stand and that management is fair.

There is an important subtlety here that I want to clarify: Did we terminate the employment of these two individuals to set an example? No. We terminated their employment because “that’s the deal.” If an example was set, it was a by-product of the action.

Do you see recurring negative situations with the people in your workplace where clarification on paper would eliminate future contention? Does it make sense that establishing clear-cut rules in advance—before any contentious situation has occurred—would eliminate future conflict?

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