Fining Employees? Then You’ve Failed as a Manager. How to Establish Order Without Punishments

Business owners often try to treat the symptoms rather than the disease. When employees break the rules, the owner’s first instinct is to toughen the penalties. However, practice shows that if a company lacks a system of planning and standardization, even the strictest sanctions won't force people to work without errors.

I was recently approached by the owner of a polyethylene packaging plant with 25 employees. It’s a classic SMB situation: rules are written, employees are trained, but violations are systematic. The owner is trying to find a balance: how many write-ups to issue, what fine amount to set, and what the ideal sequence of actions should be to ensure discipline without increasing turnover.

However, looking deeper, the problem doesn't lie in "crime and punishment," but in fundamental management errors. Let’s break down the key aspects of real discipline.

The Hierarchy of Responsibility: Who is Really Accountable for the Worker?

The first mistake is the owner's attempt to manage frontline staff directly. With 25 employees, there must be a middle link—a production head, a shift supervisor, or a foreman—between the owner and the worker at the machine.

This supervisor should be the one ensuring that staff follow instructions, safety rules, and technology protocols. If a worker breaks a rule, the owner's question should not be "What fine should I invent for the worker?" but "What measures should I take regarding the production manager?" Your job as a top-level leader is to manage the managers who report to you.

The Learning Crisis

We live in an era of total attention deficit. Social media and constant context-switching have lowered people's ability to learn. It wasn't high before, but it’s even lower now.

Today, simply introducing someone to the rules isn't enough to expect flawless execution. People need multiple repetitions, regular reminders, and direct supervision on the shop floor. However, even supervision won't work if the philosophy of punishment is flawed.

The Philosophy of Penalties: A Fine is an Admission of Defeat

Many managers see fines as a panacea, but my view is radically different. A fine is your absolute last resort. You should view it this way: if you are fining someone, it means you have completely failed as a leader and couldn't achieve results through proper management tools.

A manager applying a financial penalty should, at that moment, question their own competence. It means they failed to foresee, failed to calculate, or hired the wrong people. No fine can compensate for the damage caused by an employee. If it has come to taking away money, it means we, as managers, have failed colossally.

Chaos vs. Standards: Why People Break Rules

The core issue in most production environments is the attempt to implement rigid standards without planning.

Take a real-world example: a manufacturing company with 120 active orders. Each order averages 60 operations. The result was constant delays and defects. The disaster happened because there was no "labor norming" (standardized timing).

Order was only restored after process maps were written for every operation, accounting for:

1. Tool setup
2. Material handling
3. The task itself and cleanup

Only with time standards could managers create achievable plans. When people are overloaded or rushed, they inevitably make mistakes and bypass standards. You cannot implement instructions where there is no organization.

The Psychology of Implementation: Making Instructions Stick

In some cultures, instructions are viewed as tools of oppression or "pointless bureaucracy." To fix this, when a new policy is released, an HR representative should ask each employee a meaningful question about the text. It’s done kindly but firmly. Knowing the instructions is part of the job.

In online teams, we use tests. If a test is ignored, the HR department blocks the workstation access. This is standard practice. If you are tired of explaining the same thing 10 times, start by defining your business processes clearly. This tool will help you build a system that works without your constant intervention.

If you are tired of explaining the same thing 10 times, and not a single issue gets resolved without your personal involvement, download the guide "How to Describe a Simple Business Process So Everyone Understands It." It contains a step-by-step algorithm and an analysis of the main mistakes that prevent regulations from working. This tool will help you reduce the number of questions from employees and create a system that functions without your constant supervision.