Case Study: Who Should Be Accountable for Errors in HR Increment Sheets?

Case Study: Error in Increment Sheet Approval Process

There is a case study involving an HR professional from an XYZ organization who made an error in the increment sheet that required approval from the Board of Directors. After receiving approval from the Board, the reporting senior discovered an error in the increment sheet. Subsequently, the HR's boss froze their increment, shifted the blame onto the HR, and issued a written warning, despite the HR providing clarifications.

Verification Process and Accountability

Technically, the increment sheet should have been verified by someone before submission to the Board. The manager themselves or someone from the finance team should have verified the data provided by HR before presenting it to the Board for final approval. I would like to seek your opinion on who is at fault in this scenario, who should be penalized, and what corrective measures should be taken.

Dear Julie,

If a clerical mistake has been discovered after the board's approval, then the correction sheet should be sent to the board for approval. After correcting an error, let the board decide what action needs to be taken against whom.

There is a failure at multiple stages in this case. An HR professional of lower cadre committed an error. Her work was not audited by her manager, and it was sent for approval to the board. Meanwhile, an accuracy check was neither done by the finance team nor by the board members. This appears to be a failure of the organization's culture. Taking a lesson from this instance, the board has to take measures to institute a culture of accuracy checks. Otherwise, mistakes of this kind will continue to happen, and it could sour the relations among the staff members.

Thanks,

Dinesh Divekar

Thank you, Dinesh, for such an insightful response. Let me understand, can the manager take action against the HR for the error by withholding the increment and issuing a warning letter? This could potentially impact the HR's career, especially considering that they have never received any warnings in their entire 10-year career and have a strong reputation based on their job performance in previous organizations. What could be the HR's response after receiving the warning from the manager?

There is a new development: The manager has squared off the increment of the HR with the error amount, i.e., the increment has been withheld completely.

Dear Julie,

When workers commit an error, management imposes fines and penalties. However, fines and penalties should be reasonable. Withholding an increment appears to be too severe a punishment. Therefore, you may submit an application to the top management for a review of the decision. Let us see whether or not they agree.

The decisions on the forfeiture of wages and salaries are always taken by top management. Did the manager consult the top management before imposing a punishment? Were they in the loop? Before awarding a punishment, it is important to conduct a domestic inquiry. Did your company conduct an inquiry?

A somewhat similar case has been heard by the Income Tax Appellate Tribunal (IATA), New Delhi. You may click the following link to refer to it:

https://taxguru.in/wp-content/upload...ITAT-Delhi.pdf

In the above judgment, the tribunal has ruled:

We also find that section 271(1)(c) postulates the imposition of a penalty for furnishing inaccurate particulars and concealment of income. On the facts and circumstances of this case, the assessee’s conduct cannot be said to be contumacious so as to warrant a levy of penalty.

About Black Mark in the Service Records: You have mentioned whether or not you work in a private organization, a public sector undertaking, or a government organization. You feel that your career records were unblemished, but these could be tarnished because of the records of the imposition of the punishment. However, the imposition of punishment is an internal matter of the company. When the employee quits employment, a "Service-cum-Employment Certificate" is issued, and the award of such punishment is not mentioned in the certificate. Therefore, do not worry about this count.

Thanks,

Dinesh Divekar

I think that the manager has exercised his authority excessively to make the HR, who failed in his responsibility, a scapegoat in a situation demanding responsibility and accountability. If the HR's report in a matter involving the approval of the board can be submitted without any verification, why should there be a functional hierarchy? Authority and responsibility should go hand in hand.