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Legal/Ethical Challenge What Should You Do about an Insubordinate Employee? You are a vice president for a company in the insur- ance industry, and you supervise five managers. These managers in turn supervise a host of employees work- ing in their departments. Your company is having trou- ble achieving its sales growth goals and your boss, the president of a division, called a meeting with you and your peers to create a plan of action. The meeting was a bit volatile because layoffs were proposed, and it was agreed that all vice presidents had to reduce their budgets. This means that you and your peers were not allowed to hire consultants or send employees to training. You also have to reduce your labor costs by $300,000. This means that you must lay off employees. You informed the managers who report to you about these decisions and asked them to come up with a list of potential people to lay off. You suggested that performance should be the key criterion for deciding layoffs. Two weeks later, one of your reporting managers walked into your office with a worried look. He told you that Jim, one of your other reporting managers, had just hired a consultant to lead a team-building ses- sion with his group in another state. Not only did this require significant travel expenses, but the consul- tant's fees were well outside of your budgeted ex- penses. Further, your other employees were expressing feelings of unfairness because Jim was taking his team on a team-building trip while they were being forced to cut costs. It also was a bit inconsistent to spend money on team building when impending layoffs were just around the corner. In terms of layoffs, all your reporting managers sub- mitted a list of potential employees to let go except for Jim. You have no idea why he avoided this task. Jim's behavior clearly violates the agreement that was made about cost cutting, and you are upset that he has not submitted his list of employees to lay off. You have not yet spoken to him about this insubordination. and now you are wondering what to do. SOLVING THE CHALLENGE What would you do? 1. Meet with Jim to review his behavior. Tell him that any more acts of insubordination will result in termi- nation. Don't make a big deal about these events and don't include documentation in his personnel file. 2. Put Jim on the list of people to be laid off. Although the company will have to pay him severance, the money reduces the chance he would file a lawsuit against the company. 3. Call your human resource (HR) representative and discuss the legality of firing Jim. Jim was insubordi- nate in hiring a consultant and irresponsible for not submitting his list of potential employees to be laid off. If HR agrees, I would fire Jim. 4. Reprimand Jim by putting him on a performance im. provement plan (PIP). This plan outlines specific changes Jim needs to make going forward, and it gives him a chance to make up for his poor decisions. 5. Invent other options. Discuss. Management Theory CHAPTER 2 71

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