Managers usually have the responsibility of explaining errors in their department and sometimes even taking the fall for them (Hicks). It is in the manager’s best interest to correct errors quickly and provide training so errors happen less frequently. One of the methods that is used frequently is constructive criticism. It is important to provide your subordinates with honest feedback as to what they can do to improve and prevent mistakes. This method can be tricky to administer though. Some people see this criticism not as a way to improve but as a negative complaint about their abilities. A second way would be to have the employee correct his or her mistakes while the manager provides instruction (Hicks). This is probably the most common practice as it provides a hands on training for the employee and it is less aggressive than criticism. The attitude that the manager must have while using this method should always be positive. It should be explained why the error was made and the right way to correct the mistake. The final way, which was discussed briefly earlier, is formal disciplinary action. This can range from suspension to termination and is seen by many to be the least effective for error prevention. A manager must always remember to assess the severity of the error properly and use the appropriate method to correct it (Hicks). The best way to correct an error is to employ policies to prevent them in the first place.
Companies today are focusing heavily on efficiency (Krames). Constantly fixing errors on the operational level goes against the efficiency direction. What can companies do to help prevent numerous errors from their employees? One of the best ways is training (Krames). Companies who can provide consistent and detailed training on their procedures and operations will have a knowledgeable staff that will be able to recognize errors. However, it is still possible that their employees will make mistakes, but hopefully it will prevent the mistakes from going unnoticed. Another concept that managers can use is keeping their employee’s minds in reality. Explain to them what is expected of them, the effects of mistakes, and the way things should not be done. It is also important to keep them informed on the current status of the company and industry where they work (Krames). Lastly, it is important to provide a good example. Managers and leaders provide the framework for all employees working under them. Many workers believe that if their manager is not doing something, than they don’t need to do it. This mind set causes a waterfall down the chain of command and could affect a whole organization. All of these concepts sound good fundamentally, but they should all be analyzed and applied correctly according to the real world situation.
In today’s business world, there are many good examples of how the ideas and policies of preventative mistake management are applied. As a manager for the Bank of New York Mellon, I can speak on behalf of the company’s extensive training programs. At the Bank of New York Mellon, we strive to provide our employees training classes on their own departments as well as other departments to expand their knowledge across the company. We even go as far as to set a standard mandatory number of classes to each employee annually. With these policies, we not only reduce errors in our own areas, but we also reduce them in other departments when our employee’s realize how their work affects other areas. Even though we have excellent training methods, we still face errors each day.
When you deal with other people’s money as we do at the Bank of New York Mellon, there tends to be a greater impact of errors when they go undetected. In some cases we may even be in violation of state or federal laws. Due to this reason, we have entire departments created where their sole responsibility is to detect and correct errors. In these areas, the staff is required to reach out to the person who made the error, explain what happened, and ensure that the correction is made. We are also under very strict compliance standards set forth by the SEC, FINRA, and the federal government. Our compliance department has established a standard from many cases over the years involving customer data. Recently, the focus on identity security has been growing due to the rising number of identity theft crimes. At the bank, we have access to all of our customer data and it is extremely important to keep that data confidential. In the cases where a mistake is made and we compromise this confidentiality, we have 72 hours to report the incident to our compliance department for review. If we fail to do this in this time frame, our company could face legal action from our customer, the SEC, and the government. We stress the importance of all our compliance responsibilities to every employee constantly through the year. The financial regulatory institutions take these issues very seriously and fine violating companies frequently for non-compliance.
One of the examples of non-compliance was a number of years ago in Boston. The First National Bank of Boston was fined $500,000 in 1985 for over $110 million dollars of unreported cash transactions (Boston). Even though this was more than 20 years ago, the fine at that time was unprecedented. The transactions that went unreported were to banks outside of the country. At that time, the federal government required, and still requires today, the notification of each transaction to a non-United States bank. The policy is in existence in order to prevent and deter money laundering and tax evasion. During the investigation, the bank claimed the error was due to administrative errors and misinterpretations of the law (Boston).
Another and more recent example of unreported errors was shown by NEXT Financial Group. In July 2009, NEXT Financial was fined by FINRA for $1 million dollars (FINRA). The investigation found that NEXT Financial used a self-supervisory system in regards to their customer accounts. This policy resulted in the firm’s inability to detect one of their registered representatives placing illegal trades and charging excessive commission markups on these trades. The findings showed that these actions cost NEXT Financial’s customers more than $768,000 in losses (FINRA). When questioned about the illegal activity, the broker said it initially started as a mistake but when he realized how much commission he would make on these trades, he continued to process these illegal trades in his customer’s accounts. FINRA barred the representative from the securities industry and censured NEXT Financial for its lack of oversight.
In both of these examples, the penalties to both firms could have been lessened if not deterred entirely if they had proper oversight and reporting in place. The bank in Boston was hindered because it did not have a reliable communication system in place in order to explain the laws that they were required to comply with. At the Bank of New York Mellon, we have monthly compliance meetings to ensure we are always kept up to date with all of the laws that affect us. The NEXT Financial example was particularly egregious because the individual involved with the errors knew he was making them and he did it for personal gain. They also used a system which did not require anyone to oversee their account activity. Not only did the individual not tell anyone of his mistake, but he had nobody to tell. Both examples were events that happened in financial companies however, the same ideas can be applied to different industries as well.
The health care industry is arguably more complex and challenging than the financial industry. Very few people understand the terminology and concepts that are used on a daily basis in a hospital. This makes it very important for workers in this area communicate their errors effectively to appropriate people as well. The case study that I reviewed analyzed one 12 hour shift of a nurse technician in the ICU department. While the researcher does not state the hospital where the events took place, she notes that the hospital was of notable mention. During the shift, the researcher observes eight mistakes that are made by various employees of the hospital. Only one of the eight mistakes was formally reported to the management of the hospital.
The first error that was reported related to a patient who suffered a head injury during a basketball game. When the patient was admitted, the resident doctor ordered the patient on a routine treatment involving eight shots of medicine. When this is done, the resident enters the order for the drugs into a computer and the onsite pharmacy will deliver the drugs to the patient’s room. The order was completed correctly however when the drugs arrived, the pharmacy included an extra vial of unrelated medicine in the order. The nurse noticed the extra vial when she was reviewing the treatment orders in her computer. She took the extra vial, filled out a standardized form to report the error and gave both the extra vial and form to her supervising nurse. In this example, the hospital has the opportunity to improve its processes because the error was reported by the nurse on duty. If the event was not reported, the extra vial of drugs could have been lost or even used inappropriately on the patient.
Many of the unreported errors can be attributed to communication problems amongst the staff of the ICU. In the healthcare industry, communication failures that occur can lead to serious medical errors (Henneman). The second patient that was analyzed in this study was a man who was injured in a car accident. The patient was scheduled for surgery in less than 20 hours but required a dose of specific drugs before they would admit him to surgery. During the night shift, the nurse attending to the patient did not complete the ordered round of drugs. She also did not report this to the day shift nurse that took over the patient’s case. Before the patient was due for surgery, the nurse could not determine if the patient was ready or not. She had no idea if the patient was administered the drugs . This is especially dangerous because a second dose of the drugs could potentially be life threatening. This same treatment was also ordered verbally by the resident doctor. Verbal orders for treatment are against hospital policy unless they are made in an emergency situation. The ICU nurse could not pull up any records that the treatment had even been assigned to the patient. The success of the surgery may have depended on if the patient received the required medication and due to miscommunication and lack of reporting, the patient could have been put in a potentially deadly situation.
The study concluded with a short interview of the nurse technician that was observed. When she reflected on why she did not report the errors during her shift, she didn’t feel like it was because of fear of blame or lack of time. She even admitted that she recognized the errors herself. The nurse concluded that at the time of the error she considered them routine errors in the daily operation of a hospital (Henneman). This concept shows that the medical professionals in this hospital are becoming accustomed to these errors and potentially not realizing their complete impact on all the parties involved. The researcher suggests that the use of a focus group could be implemented by the hospital management to identify communication and reporting problems. She also suggests that the hospital utilize people that are outside of specialty areas or even outside hospital staff to identify problem areas (Henneman). These people would not be accustomed to the daily errors and would be able to recognize them more easily.
In conclusion, the ability for an organization to recognize and correct employee errors is extremely important. Failure to accomplish this can result in detrimental service for a company’s customers and even monetary penalties for violating laws. As evidenced in this report, the ideas and concepts can be used in different service industries. Each company should carefully review their situations before implementing techniques to catch and correct errors. Mistakes are bound to happen even in the most organized companies. What separates the best from the rest is how they handle them.
References
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Boston bank discovers more unreported deals. (1985, March 29). The Globe and Mail. Retrieved from LexisNexis database.
Carter, M., & Beier, M. (2010). The Effectiveness of Error Management Training with Working- Aged Adults. Personnel Psychology, 63(3), 641-675.
Chen, X., & Nof, S. (2010). A decentralised conflict and error detection and prediction model. International Journal of Production Research, 48(16), 4829-4843.
FINRA – FINRA Fines NEXT Financial Group. (2009). Retrieved from http://finra.org/newsroom/.../p119405/
Henneman, E. (2007). Unreported Errors in the Intensive Care Unit. Critical Care Nurse, 27(5), 27-35. Retrieved from Academic Search Premier database.
Hicks, T. (2010). The manager’s role in correcting employee mistakes. Retrieved from http://www.helium.com/items/1701044-correct-employee-mistake-managers-role/
Krames, J. (2009). Costly Mistakes. Leadership Excellence, 26(11), 20. Retrieved from Business Source Premier database.
