Is Fining Employees for Mistakes Fair? Seeking Advice on Better Practices

Hi All :) ,

Well, my problem is that in my company, which is a construction company, we fine the employees a lot for whatever mistakes they do. For example, if the accounts department has made a mistake, it could be minor or major. If the management notices it, they fine the employee or deduct a certain amount from the salary.

I strongly feel this kind of practice should be reduced as it's not fair to the employees, and there are other ways by which you can make your employees realize their mistakes.

Please, people, I really require some suggestions/advice on the same. I do not want my employees to suffer like that as here in my city employees aren't highly paid.

Regards,
Preeti

Hi,

The imposition of fines is not prevalent in many companies as the term 'fine' has become established. This practice was more common a few decades ago. The imposition of fine amounts is covered under the Payment of Wages Act, supported by the Industrial Employment Standing Order Act. The fine amount must be recovered and deposited into the Labour Welfare Fund.

Considering the unpleasant methods used for recovery, the practical approach is to offer a replacement (full/part) of the product for which the fine is levied. It would be inappropriate to impose a fine without proper consideration. Addressing such issues would be more suitable during appraisals, increments, or in extreme cases, through transfer or termination.

Best regards,
HRG-Rajaram

Hi,

I'm surprised that some companies still follow this policy of fines. I would like to ask you one question: what is the attrition rate in your company? I find it difficult for people to stay in a company where they deduct amounts from your salary.

Dear, I hope you will be able to make a proposal and present it to your management. They should stop this practice for the long term. Try to convince them. If you need any help on how to create a proposal, seek assistance from citehr.

Hope you'll be successful.

Archna

Hey all,

Please respond back with a few more suggestions, as I am really looking for a solution to the problem that is troubling all my employees.

Thanks and regards,
Preeti

Hi Preethi,

I have a suggestion for you.

If any employee makes a mistake which your management feels warrants a fine, you can raise a non-tolerance flag against such an employee who has committed a mistake in a few of the areas suggested below:

1. Punctuality violations
2. Indifference to requests
etc.

Then the names of such employees can be maintained in an Excel sheet or a register. In the future, when such employees' appraisal time comes, if you have an appraisal system where superiors rate the employees on a scale of 1-10, then such marks can be reduced by 5-10% as a non-tolerance penalty.

Benefits:
Employee's side:
In such a system, the employees will not feel financial repercussions and will not have to pay fines from their pockets.

Employer's side:
If an employee was supposed to receive a 15% increment, then the employee who had a non-tolerance flag raised against them will only receive 13.75%. This way, your management will also feel that mistakes are not overlooked at the company's expense.

Note: If a mistake is minor in terms of cost or damage to the company, I suggest raising the non-tolerance level for repeated mistakes. This way, even the employees will feel that the management is treating them well.

Hope this works for you.

If you need further clarification, please email me at kiransap@yahoo.com or call me at 0 98860 40246.

Regards,
Kiran

"I strongly feel this kind of practice should be reduced as it's not fair for the employees. There are other ways also by which you can make your employees realize their mistakes.

OP, do tell."