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Updated Nov 03, 2023

What Is Disciplinary Action?

Learn how to create a successful disciplinary action policy to help streamline your company's responses to employee wrongdoing.

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Sean Peek, Senior Analyst & Expert on Business Ownership
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Even the most harmonious companies may sometimes experience employee misconduct, unacceptable behavior or poor performance. While these situations can be awkward and uncomfortable, ignoring them and hoping things work themselves out isn’t the best plan. Instead, create a disciplinary action policy to streamline your responses to typical infractions and help strengthen your team. 

A set disciplinary action policy helps managers approach uncomfortable situations with predetermined actions and responses that take the guesswork and subjectivity out of addressing employee behavior. Disciplinary action can even lead to positive change and a stronger company. We’ll explain more about disciplinary action in the workplace and how small business owners and managers can create a disciplinary action policy to stay compliant and enforce high behavioral standards. 

What is disciplinary action?

Disciplinary action is a corrective measure you take in response to an employee’s misconduct, rule violation or poor performance. Disciplinary actions can vary depending on an infraction’s severity. The most common forms of disciplinary action include the following.

  • Verbal warning: A verbal warning is a formal or informal conversation between an employee and their manager. Its purpose is to point out the employee’s inappropriate behavior and outline actions the employee can take to resolve the situation.
  • Written warning: Written warnings are formal, recorded explanations of the employee’s misconduct, the disciplinary action taken, and the next steps for the employee and management. When you write up an employee, managers and internal HR departments can organize a paper trail outlining various types of employee data, including patterns and goals.
  • Poor performance review: If an employee hasn’t been meeting performance goals, they may be notified of their poor performance during a regular performance review. The manager will outline how the employee hasn’t been achieving their goals. The manager will also work with the employee to create an improvement plan that delineates steps to boost efficiency and quality. This plan will also detail the consequences if the employee’s performance doesn’t improve.
  • Reduction in pay: If an employee doesn’t improve their performance, management may decrease their pay or demote them. Failure to improve job performance indicates that it may be best to transition the employee to another role.
  • Termination: As a last step, if you feel the employee’s work performance can’t be redeemed, it may be time to terminate the employee.
TipBottom line
When implementing an employee's performance improvement plan, set a concrete goal, such as a specific sales figure. It's harder to quantify other improvements, such as changing disrespectful behavior; these issues may require a more personal approach.

What behaviors incur disciplinary actions?

Various behaviors may require a supervisor to intervene and take disciplinary action. Here are a few examples of these behaviors.

  • Threatening others: Any verbal threat of violence, no matter the tone, must be taken seriously with timely disciplinary action.
  • Sexual harassment: Sexual harassment is any unwanted or inappropriate verbal remarks or physical action conducted in a sexual or suggestive manner that one co-worker inflicts on another.
  • Fraudulent behavior and theft: Stealing and any other situation where an employee uses their position to lie to or manipulate others within the company — or outside sources — is considered fraud. Employee accounting fraud is one example of fraudulent behavior.
  • Discrimination: Discrimination is when an employee says or does something inappropriate toward another employee based on their race, gender, religion, age or any other personal aspect.
FYIDid you know
Employment and anti-discrimination laws underscore the seriousness of discrimination in the workplace. If an employee experiences discrimination in the workplace, the employer may face severe consequences.

What is a disciplinary action policy?

A disciplinary action policy is an organization’s response to an employee’s wrongdoing. It clearly outlines specific consequences for every type of unacceptable behavior. The policy can protect your company from wrongful termination allegations and ensure all employees enjoy equal treatment and protection. 

Many companies will use data collected from HR software to get a holistic view of employee behavior and performance. This information can better inform supervisors of what, if any, disciplinary actions should be taken.

“We typically look at data collected in relation to disciplinary actions and employee sentiment in order to identify a market change in the office’s attitude following an intervention,” explained George Santos, managing director and head of marketing at 180 Engineering. “When it comes to the big picture, we may look at overall patterns in order to determine when interventions are most needed, as well as the effectiveness of our disciplinary strategies.”

How to create a successful disciplinary action policy

A thorough disciplinary action policy imparts clear expectations to all employees. Here are some best practices to follow when creating or updating your policy:

1. Identify clear rules and disciplinary consequences.

Establishing a comprehensive, progressive discipline policy that outlines responses to unwanted employee behaviors ensures your team knows the correct procedures to follow. Clearly specify the consequences of various violations. For example, some infractions may lead to verbal or written warnings, while others are grounds for termination. You can provide real-life examples of misconduct situations that lead to warnings or termination.

In many cases, your disciplinary measures will aim for improvements rather than punitive repercussions. Detail all company policies and expectations so there’s no room for ambiguity. The goal is to set up your employees for success. 

2. Create and communicate your policy document to employees.

Write down your rules and disciplinary consequences and create an official policy document. Employees must have easy access to this document and be able to refer to it when necessary. For example, your disciplinary action policy can become part of — or a supplement to — your employee handbook. 

During the hiring process, HR reps should discuss your company’s disciplinary action policy with any potential new hire. When employees complete new-hire paperwork, they should sign documents stating that they read and understand the disciplinary action policy. Additionally, anytime a policy is changed or updated, employees should be informed of the revisions.

TipBottom line
If your business has a company wiki or an employee self-service portal for HR functions, your policy should be readily available in these resources.

3. Document all disciplinary actions your company takes.

Record all disciplinary actions in detail so your business has a complete record of all activity and establishes a legal and stable procedure. Store all related documents and records securely within an employee file for reference and protection within the HR department. You should also outline your documentation procedures and expectations with managers and employees. 

4. Educate your managers on enforcing the disciplinary action policy.

You can prevent potential legal issues by ensuring supervisors consistently practice the company’s disciplinary procedures. Your HR department has crucial responsibilities like educating, training and overseeing managers to ensure they use the policy consistently and correctly. Consider holding regularly scheduled training sessions for managers to review various situations. 

5. Consistently update your disciplinary action policy.

Keep your policy current through annual reviews and enacting necessary updates. With many businesses adopting hybrid and remote work plans, policies will need updating to cover issues specifically related to these work formats. It’s essential to revise your disciplinary action policy to fit your business’s current situation so everyone is working with the correct guidelines. 

It’s also essential for your company’s supervisors to contribute new information or data to keep the disciplinary policy current and relevant.

“If hoping to decrease disciplinary problems, you might examine documentation outlining disciplinary action employees have received, such as a series of warnings,” advised Will Fang, product manager of HR Tech Strategy for Abercrombie & Fitch Co. “If documentation is detailed enough, you might examine the types of rules or standards most commonly violated by employees, disciplinary action taken along with the suggested improvements, and recurrence rate of behavior requiring disciplinary action.”

Did You Know?Did you know
The best HR software can help you create a disciplinary action policy. For example, read our Bambee HR software review to learn about a platform that can generate custom disciplinary action policies as well as sick leave policies, PTO policies and more.

What should be included in a disciplinary action policy?

You’ll need to include the following elements in your disciplinary action policy to ensure everyone is on board and understands the rules and consequences. 

  • Policy overview: A disciplinary action policy should begin with an outline of what employees can expect within the policy and the steps that will be taken if an infraction occurs.
  • At-will employment: Your company’s policy should clearly state that all its employees work for your business at will and can be terminated at any time for any legal reason. This allows you to change employment terms, including a worker’s responsibilities, compensation and employee benefits. This statement also gives employees flexibility; they can vacate their positions without notice and without facing legal consequences.
  • Forms of discipline: The policy should have a section that outlines the steps that will be taken to address misbehaviors and the disciplinary forms that will ensue. This section should clearly outline why the wrongdoing is an issue and what must happen next to move forward. This section should also detail the consequences if the employee repeats the misstep. Managers should have a clear understanding of how to document each step of the disciplinary process so employees are fully informed along the way.
  • Right to appeal: Employees should have the right to appeal any disciplinary decision they disagree with. If they feel they weren’t treated fairly, they can document their grievance and appeal the disciplinary action to HR. These rights should be outlined clearly for the employees’ reference.
  • Legal protections: Policies should outline the company’s legal protections. This section should be created with the assistance of a legal professional.

Disciplinary action policy example

Here’s a general outline of a disciplinary action policy. Your HR software provider may also have disciplinary action templates available. While this is a general outline, your specific policy should be as detailed as possible.

1. Policy overview

[Company name]’s disciplinary action policy will examine the steps we will take to address any employee failure to perform or any behavior deemed inappropriate. This policy applies to all employees.

2. At-will employment

Every employee of [company name] is an at-will employee and can be terminated at any time for any reason.

3. Inappropriate behavior

The following types of behavior are not tolerated at [company name]. Disciplinary action will be taken in the event of any of these issues in accordance with their severity:

  • Verbal harassment
  • Sexual harassment
  • Threats of violence
  • Fraudulent behavior
  • Theft of company items
  • Discriminating against others

4. Disciplinary steps

In the event an employee participates in any of the above actions, our disciplinary process will move through these steps:

  1. Your supervisor will document the misconduct and discuss it with you privately.
  2. Your supervisor will file the official forms with HR.
  3. You will be informed of the disciplinary action in a timely manner. [Outline the disciplinary actions here.]
  4. You will be informed of the reactive steps that need to be taken to remedy the situation.
  5. Right to appeal

As an employee of [company name], if you do not believe you were treated fairly during the disciplinary process, you may appeal this decision.

Disciplinary action FAQs

Here are a few of the most common questions regarding disciplinary policies and procedures.
Giving an employee one or two written warnings (an initial and a final warning) is best practice before dismissing them. This may come after an informal verbal warning; however, written warnings help HR keep a paper trail of incidents. Exceptions to this rule include behavior that is considered severe misconduct within your business, which may lead to immediate termination. It's essential to conduct an investigation before terminating any employees to avoid unfair dismissals.
HR's role in disciplinary actions depends on the business and resources available. Involvement ranges from being present during disciplinary meetings to handling discipline in severe cases. HR departments shape policies and enforce procedures for rule violations, which are typically detailed in the employee handbook.
There is nothing that keeps HR from conducting disciplinary investigations or sitting in on a disciplinary meeting or hearing. They can often leverage their expertise. Investigations or hearings can be internal or independently contracted, but should remain unbiased and uninfluenced by the wider HR team or other team members.
Firing an employee without a reasonable investigation can lead to legal issues down the road. The Acas Code, which sets the rules and guidelines on how employers and employees should handle disciplinary matters, advises employers to conduct necessary investigations in a timely manner to ensure the correct facts and evidence are collected. After that, they can decide on the next steps while ensuring employees receive fair treatment.
author image
Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek co-founded and self-funded a small business that's grown to include more than a dozen dedicated team members. Over the years, he's become adept at navigating the intricacies of bootstrapping a new business, overseeing day-to-day operations, utilizing process automation to increase efficiencies and cut costs, and leading a small workforce. This journey has afforded him a profound understanding of the B2B landscape and the critical challenges business owners face as they start and grow their enterprises today. In addition to running his own business, Peek shares his firsthand experiences and vast knowledge to support fellow entrepreneurs, offering guidance on everything from business software to marketing strategies to HR management. In fact, his expertise has been featured in Entrepreneur, Inc. and Forbes and with the U.S. Chamber of Commerce.
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