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How to Recover from an Employee Error

Posted on: August 29, 2017 by Signature Insurance Group

Reducing Employee Error > Recovery Tips

Try as we might, we can’t prevent mistakes from happening indefinitely. Sooner or later, especially if you work in a high-stress field, you or one of your employees may make a mistake during work. It could be something small, like forgetting to do a task, or it could be a large-scale mistake that causes an injury or death, costs a large amount of money, or harms your company’s relationship with customers, clients, or partners.

Just earlier this year, for example, Amazon found itself the center of a bad situation when a small human error – more specifically, an incorrectly-entered command when taking servers offline for maintenance – caused the company’s Simple Storage Service cloud system were offline for hours, and led to estimated losses of $150 million for S&P companies and $160 million for financial service companies in the United States. The employee in question was not acting maliciously and the service was able to get back online within a few hours, but the damage was done and many parties involved were facing severe, real consequences. If such an error occurs at your business, it is crucial that you are able to protect yourself with a Management Liability Insurance policy and that you have a strong game plan to help your business recover quickly.

Addressing the Employee

Unless the incident in question was caused by a freakish accident, there will be an employee who has to take responsibility for the mistake. The first step is determining who is responsible; your employees will not want to get in trouble, but it is crucial that you know exactly who was responsible for the mistake and that you have accurate information. One method to do so is to create an office climate that rewards reporting for both employee error and near-miss events, so employees will not fear retribution for smaller mistakes. While you cannot promise that there will not be consequences, you can create an environment that encourages people to inform their superiors of mistakes as quickly as possible.

Once you understand who was responsible for the employee error, it’s time to determine how at fault they are and how they will be disciplined. An employee error that was purely accidental should not be punished as severely as one committed due to carelessness, apathy, or malice. Find out what caused the error: did the employee just not care, or was he or she exhausted or stressed out, or did he or she misunderstand instructions? The ramifications of the error should also be considered when determining how the employee will be reprimanded, as a mistake that caused a high loss of revenue or hurt your company’s reputation should be taken more seriously than a minor one with no real impact on your business. Should the employee be terminated? It’s completely up to your discretion how you want to discipline your employee, and you’re welcome to keep on an employee if you feel that they are genuinely sorry for their mistake and that it won’t happen again, but you don’t want to create a company culture that encourages any kind of mistake-making, and you especially don’t want to keep an employee who is a liability.

Moving Forward

After employee errors have occurred, there are several things that you must do. Once you know what caused the error, work on preventing it for the future. If a policy was unclear or incorrect, review it with your team and create a new, more effective one, and distribute it to the company. You should also review other policies and procedures to ensure that no future errors occur. In addition, if you do not already have one, create a formal policy for how employees who commit errors should be addressed. Doing so will help you to know what to do in the future, and having it in writing will protect you from any potential Employment Practices Liability issues from employees who feel that they’ve been treated unfairly.

About Signature Insurance Group

Signature Insurance Group has been working since 1969 to provide comprehensive insurance solutions to individuals and businesses across the United States. We offer a range of insurance products and services in risk management, employee benefits, business insurance, and personal insurance, and we pride ourselves on our commitment to creating “Signature Relationships” with our clients where we commit to providing the best, most comprehensive service possible. To learn more about our goods and services, contact us today at (800) 464-3606.

Posted in: blog Business Insurance Management Liability Southern California