HR Management & Compliance

Entry-Level Employee Costs Company Big Time, but Keeps Job

In several previous posts, we’ve looked at instances of low-level employees’ actions that have cost their companies enormous amounts of money, bad PR, and regulatory scrutiny and penalties.

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In those examples—including Starbucks, Samsung, and Wells Fargo—the people making the mistakes or committing the bad acts were fired, and some executives were even forced to resign. But we wanted to end this series on a positive note.

While in the case of Wells Fargo, the vast majority of the scandalous events were intentional, our other examples included instances of poor judgment and simple mistakes. These types of missteps really shouldn’t result in an employee’s being terminated. In many ways, that’s a bit of a cop-out.

Big Loss, But Employee Stays

Braskem Americas CEO Mark Nikolich recently discussed an incident in which an employee’s mistake cost the company $2 million. But he wasn’t fired.

Nikolich explained that an inexperienced team member tasked with buying and selling commodities used by the company as raw material made a bad deal that lost the company $2 million. He says the deal was at the wrong time and had a poor structure. When asked if the employee was fired, Nikolich responded, “Absolutely not.”

He explained why: “They were deathly afraid [of being fired] because they came from a culture that was penal, that laid blame. Worse yet, leaders put blame, which is the worst kind, right? Because that has all other kinds of implications about future progression, career, all those things.”

He added that a mantra Braskem operates by is “Mistakes are fine. Don’t make the same mistake twice.” Then, it focuses on fixing the process that allowed the mistake to happen.

Be Proactive to Avoid Big Risk

We’ve discussed four specific examples in which entry- or low-level employees have caused significant issues for their organizations. They highlight the importance of training not only on the ability to effectively perform day-to-day tasks but also on the avoidance of major risks.

While the employees involved in these examples bear responsibility for their actions and mistakes, the organization itself is ultimately responsible for ensuring its employees are properly trained so these mistakes are avoided to the greatest extent possible.