Managerial Ethics
Managerial Ethics
(OP)
Good People,
So my boss, or I should say one of my bosses, who is the senior mechanical engineer, was in charge of a job a few months ago. It was to modify a balance line on a pump we have onsite. (Keep in mind this pump is critical to plant operations.) A quotation was submitted by a contractor to do the works and then, a few days after, they submitted a change increase in price of approximately $1,100 US. My boss received VERBAL approval on accepting this change and the job was carried out successfully. Last week, management re-examined the issue and decided that they were not going to pay the additional 1100 dollars and that my boss did not get written approval and that he had to pay this money out of his own pocket. I mean yes my boss did not submit the written approval in time but he did get a verbal..he got the job done quickly as every second this particular pump is offline, revenue is lost and he is still being made to do this?! What are your opinions? I think its wrong..
So my boss, or I should say one of my bosses, who is the senior mechanical engineer, was in charge of a job a few months ago. It was to modify a balance line on a pump we have onsite. (Keep in mind this pump is critical to plant operations.) A quotation was submitted by a contractor to do the works and then, a few days after, they submitted a change increase in price of approximately $1,100 US. My boss received VERBAL approval on accepting this change and the job was carried out successfully. Last week, management re-examined the issue and decided that they were not going to pay the additional 1100 dollars and that my boss did not get written approval and that he had to pay this money out of his own pocket. I mean yes my boss did not submit the written approval in time but he did get a verbal..he got the job done quickly as every second this particular pump is offline, revenue is lost and he is still being made to do this?! What are your opinions? I think its wrong..





RE: Managerial Ethics
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Managerial Ethics
RE: Managerial Ethics
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Managerial Ethics
RE: Managerial Ethics
RE: Managerial Ethics
If the manager is entitled to make contracts on behalf of the company (and this is implied, since the company apparently knew what was going on with the critical process equipment), then barring any fraudulent conduct, the company is solely on the hook for nonpayment. The contractor is not entitled to recover anything from the manager himself (because the contract was not made on his own behalf). So, if they don't get their money, they sue the company. The company can sue its own manager, afterwards, if it wants the money back that badly.
But generally, barring some very strange (and probably unenforceable) contract of employment between the manager and the company, they're out of luck with regard to directly deducting it from his payroll, or billing him for it. (That's a good way for the company to get itself sued for breach of contract for failing to pay wages.)
And now that they've made that empty threat, if they instead exercise their recourse to fire him, they've also conveniently provided him with a rationale for a wrongful termination suit.
Any way you look at it, the company is screwed now. The best plan is to eat the expense, and admonish the manager for not following the required procedure. Anything else will end up costing more in legal fees. The worst-case scenario would be a court order to pay the contractor or have the machinery seized—a court probably wouldn't go that far, unless there was serious bad faith, and no other prospect for recovering the money.
RE: Managerial Ethics
RE: Managerial Ethics
If this is your companies mentality, then I might begin looking too before something similar happens to you.
RE: Managerial Ethics
RE: Managerial Ethics
Has this happened several times and managment has drawn a line? Is this a "problem" employee they are trying to get rid of? Office politics? Company financial problems?
It just seems like for $1,100, good employee, first offense it would be a slap on the wrist, and a "don't do it again" admonishment.
RE: Managerial Ethics
RE: Managerial Ethics
Regards
Pat
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RE: Managerial Ethics
Cheers
Greg Locock
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RE: Managerial Ethics
I find it difficult to believe that this stuff actually happens. What kind of place does this? Probably a place run by MBAs.
Regards,
SNORGY.
RE: Managerial Ethics
Who did your boss get verbal approval off and where is this person now?
desertfox
RE: Managerial Ethics
RE: Managerial Ethics
RE: Managerial Ethics
Managers are supposed to be authorised to make deals but in reality they usually have to follow the rule book.
But you have to assume the guy has authority to spend $1100 on paper clips, or sandwiches and soft drinks at lunch time meetings all year long if he chooses and so why not on customer good will? Heck, they probably spend that in a week on dining out with clients and the top boss could probably spend that on a single "business lunch" at the golf club.
So yes, $1100 seems chicken feed over which to either beat up on the manager or create a fuss with the client; its a hell of small amount over which to lose a customer.
So is there some thing behind all this as ImminentCollapse suggests?
Which brings us back to oxymoron; top management are, as usual, behaving in their usual devious unscrupulous ways whichever scenario is true.
By the way, please don't say this is a family run company.
JMW
www.ViscoAnalyser.com
RE: Managerial Ethics
RE: Managerial Ethics
RE: Managerial Ethics
There is no legal authority to charge employees for expenses incurred by the company, unless he signed a contract saying that was acceptable. Most employee don't sign those contracts except in specific situations (i.e, tuition reimbursement must be repaid if the employee fails the class.)
The most strict option a company has is to require an employee take time off without pay (suspend them) but they can only do that based on the discipline policy they have in place.
Of course, is this assuming the contractor is independent from the boss. If there was some backroom deals going on, then it changes the situation a bit. I still don't think it's legal to withhold employee salary just because the company felt like it.
RE: Managerial Ethics
RE: Managerial Ethics
**********************
"Pumping accounts for 20% of the world's energy used by electric motors and 25-50% of the total electrical energy usage in certain industrial facilities."-DOE statistic (Note: Make that 99% for pipeline companies) http://virtualpipeline.spaces.live.com/
RE: Managerial Ethics
RE: Managerial Ethics
RE: Managerial Ethics
This contractor once returned money from an overbid job, and I respected him for it by writing a maint. contract. Yes, you need to build trust. Some contractors come in high all the time, and they wonder why they don't get jobs.
RE: Managerial Ethics
Unless there is a written policy that limits him from verbally obligating the company to overages in excess of a certain pre-ordained amount, and in writing, and he exceeded that amount by authorizing the $1100.00 expendeture, he does have legal recourse. The fact that the pump was critical would have no bearing if a written protocol was not followed. Should the company become mad that the pump was not fixed in a timely manner tdue to the limit, they would have to raise the limit for him for any future occurrences. But that should not affect this occurrence.
Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask
RE: Managerial Ethics
I've worked in maintenance for 9 years so I know what these verbal contracts can lead to. I am not saying that this is the case as I don't know all the details, but in a previous company that I worked for, we had something like "verbal" contracts with contractors always going on. This reached a situation that in fact almost all contracts were in fact signed after the work was completed and costs already incurred. Until one day the company bosses decided that it was enough and that they wouldn't pay the contracts that were not written prior to the work actually started and they informed the contractors accordingly.
For a time, we struggle a lot because the practice of verbal contract was embedded in our and contractor's maintenance culture and we had some problems. But after a few weeks of adjustment and reorganization, the number of verbal contracts reduced to virtually none.
Was this the case here?
Did the original quotation for the work was 250 US and then the additional was 1,100US?
Either way, unless the manager was warned several times about this, it seems to me highly unreasonable to make him pay for the mistake.