The 10 Biggest Legal Mistakes Physicians Make When Disciplining Employees

Excerpted from The Biggest Legal Mistakes Physicians Make: And How to Avoid Them

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Executive Summary

No matter how excellent physicians’ clinical skills, their practices will suffer if employees are not managed properly. Knowing when, why, and how to impose discipline is essential in employee management. Small performance problems that are not addressed promptly or properly often develop into continuing sources of aggravation and stress for physicians and their support staff. Such problems also can grow into serious trouble for the practice, exposing physicians to litigation by employees, patients, and vendors. This chapter discusses nonunionized workplaces only. Collective bargaining agreements or civil service regulations usually have their own rules on when and how to discipline employees.

Mistake 1 Not Having Clear Timekeeping and Attendance Standards and Records

Associating time clocks with blue collar working environments, physicians’ offices often keep time cards and attendance records on an informal “honor” system. Some employers do not keep such records at all, under the assumption that timekeeping is not required because the office employees are “salaried.” Too often, staff are not given clear directions on when they must arrive and when they may leave; they are not instructed to note time off for lunch or for extended breaks; they are not told when they may work overtime. Clear guidelines are not set for sick, personal days, or vacation days; paid holidays; or leaves of absence. Because payroll is likely to be the most sizable portion of office overhead, employee productivity is critical to a successful, profitable practice. Equally important, failure to keep accurate time and attendance records can expose a medical practice to significant litigation and penalties by both current and former employees.

Action Step Physicians should establish timekeeping and attendance rules that fully comply with federal and state laws and regulations. Accurately maintained timekeeping and attendance records will reveal problems that need to be addressed. If the “honor” system does not work, physicians can use a punch-type time clock.

Mistake 2 Not Having Suitable Written Job Descriptions or Performance Standards

Most physicians in the United States practice in groups with fewer than nine doctors and fewer than 20 employees, therefore their offices tend to be run in a “we are family” style. Many small practices do not have written job descriptions or employee manuals or written policies and procedures. It is difficult to discipline employees when job requirements have not been spelled out or employees have not been informed of the expected standards of conduct.

Many physicians’ offices rely on cookie-cutter, one-size-fits-all manuals or policies and procedures that are available from the local chamber of commerce, professional associations, or a human resources consultant. While helpful, such materials, can be a hindrance if they have not been tailored to the particular needs and preferred management style of the practice, have not been checked for accuracy and internal consistency, or are not kept up to date with the latest laws and regulations.

Action Step Employees need to know what is expected of them, and they should be told clearly what is not acceptable behavior. Physicians should develop and implement management tools (e.g., job descriptions, employee manuals, or written policies and procedures) that comply with federal, state, and local laws and regulations, are kept up to date, and specifically fit the physicians’ practice needs and styles.

Mistake 3 Not Conducting Regular Performance Evaluations

In a small office environment, physicians may think that conducting regular performance evaluations is a waste of time because the physicians work so closely with staff that the staff presumably knows if their performance is or is not acceptable. However, self-assessments are rarely introspective, and employees usually err on the side of perceived excellence. Even in practices where employees are regularly evaluated, the reviewer may gloss over shortcomings and highlight strengths so that the employee will “feel good” at the end of the review.

Action Step Physicians’ offices should evaluate all employees (even if they have only one) at least once a year to address the good and the bad. Evaluations should be based on attendance, job requirements, and relevant office policies and procedures. The evaluations should include specific timetables for correcting shortcomings and goals for further development. In an evaluative setting, problems can be discussed in a nondisciplinary way; for example, constructive criticism can be combined with positive reinforcement. Physicians should document the evaluations and ask employees to acknowledge receipt of the evaluations by signing the documentation.

Mistake 4 Not Adhering to Established Standards or Applying Standards Inconsistently

Even though physicians’ offices may have formal management tools in place, for various reasons (e.g., lack of training, press of business, “family-style” supervision, or reluctance to criticize), these tools may be neglected or be inconsistently applied. For example, employees may not fill out timecards showing tardy arrivals or early departures, may not note time taken off for lengthy breaks or lunch, or may not indicate overtime worked. Staff supporting certain doctors in the practice may have more leeway than other staff in taking time off, attending to personal business, engaging in unprofessional behavior, and the like. Certain individuals are given perks and benefits that others are not. Some must keep up with demanding doctors, while for others the attitude is laissez-faire. Inconsistent and unequal application of attendance standards, employment policies, and benefits leads to morale problems and problems with discipline. Worst of all, inconsistency and unequal treatment may violate applicable laws or regulations.

Action Step All employee policies must be applied fairly, equally, and consistently. Exceptions to established policies should be granted rarely and only after careful consideration of the consequences. If necessary, physicians should consult experienced employment counsel.

Mistake 5 Dealing with a Problem Too Quickly or Too Late

Sometimes a problem provokes an immediate, unconsidered response (e.g., “You’re fired”). Sometimes, physicians put off dealing with a problem either because other pressing matters intervene or because they want to avoid confronting the offending employee.

Action Step Physicians should address employee problems in a timely manner and tell the employee or employees involved that their conduct will be dealt with appropriately. Physicians should never discipline an employee while they are angry or upset with the employee, but should wait until their emotions have cooled. On the other hand, physicians should not wait so long that memories have faded and the facts leading to the need for discipline have become fuzzy. Depending on the issue, physicians should tell the employee or employees involved that an investigation into the misconduct or circumstances surrounding the misconduct may be necessary. They should not let the offending employees think that no action will be taken, and notify whoever is responsible for personnel management promptly that a problem has arisen.

Mistake 6 Not Conducting an Appropriate Investigation

Physicians too often ignore problems or complaints and investigate a problem only after it has become a crisis. Even then, the investigation may be cursory or incomplete.

Action Step Physicians should adopt proper investigative procedures and recording techniques. No matter how slight an employee performance problem appears to be, physicians should conduct an investigation into the circumstances leading to the problem. A plethora of employment and civil rights laws prohibits discrimination in the workplace; therefore, disciplinary measures must be applied equally to all employees. At a minimum, physicians wishing to conduct a proper investigation should do the following:

Appoint an investigator who is not directly involved in the situation.
Refer to the employee manual, office policies and procedures, or any other rules or guidelines that apply to the misconduct at issue.
Examine the actual behavior that calls for discipline (i.e., interview the parties involved and review the pertinent written documentation or other tangible evidence).
Keep an open mind. Sometimes performance problems are “personality conflicts” and not outright violations of office policy.
Remember that employees have a right to privacy but not a right to secrecy. Thus, the investigator should be as discreet as possible and keep information confidential; however, no employee involved in an investigation can be promised anonymity. Everyone involved should be cautioned against engaging in conduct that could be regarded as retaliatory.
Ask open-ended questions: who, what, where, when, why, and how. Make sure to ask if there are any witnesses or any documents or other tangible evidence.
Keep good notes of the investigation. Identify the interviewer, the witness, and the date.
Depending on the seriousness of the matter, ask the persons involved and any witnesses to give written statements.
Keep the notes, statements, and results of the investigation in a separate investigative file.

Mistake 7 Disciplining Employees Differently

A common problem in private practice is that particular employees may receive favored treatment and are not disciplined for violating the practice’s policies, while others who are not so highly regarded are punished for engaging in the same type of misconduct.

Action Step Physicians should refer to prior history before imposing discipline and consider the future consequences of the discipline. If misconduct arises out of the type of activity that employees normally engage in during the course and scope of their employment, precedent is important. Physicians should ask how the problem was dealt with in the past. If this is the first time this type of misconduct has occurred, how it is dealt with will establish a precedent for the future. Physicians should remember to deal with all employees equally. Exceptions to the rules should be made rarely, if at all.

Mistake 8 Failing to Make the Punishment Fit the Crime

Because most physicians have busy practices, they often fail to impose discipline that is appropriate to the misconduct or performance problem that has arisen. Instead of making the punishment fit the crime, they may simply express their impatience in passing or vent their frustrations at the employee without taking the time to engage the employee in a thoughtful disciplinary process.

Action Step Physicians should fit the discipline to the misconduct and follow up appropriately to address the causes and the consequences. To be effective, discipline must fit the misconduct at issue and should include guidelines and/or time frames for improvement. The disciplined employee must be clearly informed why the misconduct requires discipline, what the discipline will be, and that improvement is required. Physicians should try to address the root cause of the problem. If ignorance of office procedures is the trouble, additional training should be provided. If attendance is the issue, and family or personal problems are the cause, a referral to a counseling service may be helpful. If attitude or personality clashes cause difficulties, physicians should monitor the behavior of all involved more closely and, if possible, separate the employees. Physicians should follow up with the disciplined employees and their supervisors to make sure the problem has not reoccurred.

Mistake 9 Failing to Document Discipline

Although physicians are trained to maintain patient charts, they often do not apply those skills to maintain employee disciplinary records. Contemporaneous notes are essential in dealing with disciplinary issues for the same reason they are essential in treating patients: The notes memorialize what was said and which actions were recommended and taken. Reliance on memory alone is ill advised, especially if the discipline results in adverse employment actions, such as suspension, demotion, or termination.

Action Step Physicians should document all discipline given, including oral warnings. Depending on the policies and procedures adopted by the medical practice, employees may be subject to progressive discipline. In other words, the policy first calls for oral, then written, warnings before termination. No laws require employers to adopt a system of progressive discipline. Under certain state laws, systems of progressive discipline may create an employment agreement to terminate only for good cause. If that is the applicable law, a progressive disciplinary system is not recommended. Regardless of the disciplinary system adopted, physicians’ offices should document all discipline. Thus, even an oral warning should be noted in the employee’s file. If possible, the employee should acknowledge in writing that a warning or other discipline was given.

Mistake 10 Not Taking Applicable Laws into Account

A multitude of laws affect physicians’ ability to discipline certain categories of employees. For example, if a problem arises out of an employee’s frequent absences from a workstation and those absences are directly related to a disability or pregnancy, discipline may be problematic because laws protecting disabled or pregnant employees require that employers make reasonable accommodation for their conditions. Likewise, if a problem arises because an employee does not wish to adhere to a work schedule, a schedule adjustment may be needed to accommodate that employee’s religious beliefs, jury or military service, or request for family or medical leave. Wage and hour laws may limit the type of discipline; for instance, exempt employees can lose their exempt status if their pay is docked for disciplinary reasons. Employees who have complained about the terms and conditions of their employment may be protected against employer retaliation. If a link exists between the complaint and the discipline, an employer may be liable.

Action Step Physicians should ensure that employees are not being disciplined for reasons that arise out of the employees’ protected status and that the discipline imposed does not violate any applicable laws. They should check with trained, experienced human resources professionals or employment counsel before taking any substantive disciplinary action.

Conclusion

Physicians’ offices that adopt and adhere to proper employment policies and procedures, including consultation with legal counsel when necessary, will be able to monitor performance better, impose appropriate discipline, and avoid the stress and cost of nonproductive employee behavior.

Written by:

Rosa M. C. Cumare, Esq.

Peer reviewed by:

David J. Hamilton, Esq.