Thursday, June 12, 2008
An Exercise in Judgment
The company has two valuable and high-potential employees, Jack and Stephanie. They are managing the critical launch of the company’s newest product, one upon which the future of the company rides.
An internal audit reveals that the two have been using Jack’s company credit card to purchase personal items that have no conceivable connection to the company (a new DVD recorder, for example). The human resources manager confronts Jack, who admits that his personal finances had gotten out of control, that it was a bad mistake, but he was desperate, and at some point, intended to repay it. Jack says that he told Stephanie what he was doing, learned that she also was in bad financial straits, and lent the card to her. Jack is terminated for cause immediately and escorted out of the building, and does not contest the termination.
The human resources manager then confronts Stephanie. Stephanie first admits that she used the card, then claims later that she did not, and that Jack purchased the items for her, without her knowing the source of the funds. Over the next two days, as the manager investigates the situation, Stephanie consults with a lawyer, who insists that the company does not have a basis for a termination with cause. In order to get the matter behind him, the manager agrees that Stephanie will be allowed to sign a routine separation agreement and mutual release, and to receive two weeks’ severance pay, half of the amount to which she would have been entitled under the company policy.
Friends of Jack complain that concessions made to Stephanie are not right, and that there has been unfair and unequal treatment of the two: if Jack was terminated for cause, Stephanie should have been as well.
Was it either illegal or wrong for the manager to treat Jack and Stephanie differently? I am more interested in the wrong than the illegal (as I cannot think of any reason why it would be).
Note Bill Henderson's observation that "it is just damn hard to define judgment in a way that is objectively defensible." Is objective evaluation of this judgment even possible? If not, how do we evaluate it? Respond to Jack's friends?
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