Organizational Wellness

HR’s Guide to Employee Misconduct: Definition, Types, and Solutions

Aug 10, 2023
Last Updated Aug 10, 2023

As an HR professional, you were likely drawn to the field because of the opportunity to work directly with other people every day. Onboarding new employees, developing new training materials, even mediating workplace conflicts can be very fulfilling as you help your fellow team members navigate challenges and achieve success.

In working with team members, you’ll also have to manage instances of harmful behavior and misconduct. While these are undoubtedly tougher circumstances to approach, this responsibility is one of the most important jobs of any human resources leader. Misconduct can be harmful to individual employee performance as well as the company’s reputation.

But with effective tactics, you can help identify this behavior before it gets out of hand and protect the organization from risk. You can even help employees correct the misconduct so they can get back to being productive, engaged members of the team.

What is Employee Misconduct?

Employee misconduct is behavior that doesn’t adhere to the standards of conduct outlined in an organization’s policies and procedures. These standards can be found in a company’s employee handbook, among other places. In its lightest form, employee misconduct can be a minor policy violation that impacts performance or productivity. At worst, it involves behavior that is illegal, unethical, or causes harm to the company.

Sometimes, employees misbehave because they don't understand the rules or policies. They might be new to the job or industry, and still getting familiar with workplace norms. That might be the case for a team member who's late once or twice or isn't quite following your business-casual office dress code.

But in more severe instances, misconduct can involve illegal activities such as sexual harassment, discrimination, or workplace violence. Most people understand the moral implications of stealing or physically harming another person, and these instances of gross misconduct need to be addressed swiftly and succinctly.

Employee misconduct is a serious issue for companies, because employees might start to feel like the workplace isn't safe or fair. This can spark issues with employee morale, engagement, productivity, and turnover. It even costs businesses financially — the total bill for U.S. companies dealing with the effects of misconduct was estimated to be about $20.2 billion, according to Vault Platform.

Types of Employee Misconduct

There are many types of employee misconduct, and the severity can range between minor infractions to major policy violations. Some common cases of employee misconduct include:

  • Disregard for safety standards. Employees who repeatedly ignore these protocols put their own — and their coworkers’ — health and safety at risk. This type of misconduct becomes more serious depending on the type of work environment. Employees who are around heavy machinery or toxic chemicals, likely have stricter protocols to follow (for good reason) than office workers.
  • Harassment of any kind. This includes sexual harassment, racial slurs, and even cyberbullying over company email or social media accounts. Workplace bullying can cause a toxic company culture and have long-term repercussions on both individuals and teams.
  • Inappropriate use of company property or resources. Many companies prefer for employees to use company computers and equipment strictly for work purposes, but this can also vary in severity depending on industry. For example, employees who deal in confidential info might not be permitted to work remotely in public places because of privacy and cybersecurity risks.
  • Excessive tardiness or absenteeism. This is a less severe type of misconduct but it can still have an effect on team performance. Some workers might be late to work or take too many unexcused absences periodically, and if the behavior becomes excessive, it could damage their job performance and create a drain on productivity.
  • Making rude comments or jokes. While this could be considered harmless in certain situations, employers should still tread lightly when it comes to off-color jokes or comments at work. Even if the comments are not directed at any particular person, they could still create an uncomfortable atmosphere for others in the workplace.
  • Theft. Stealing or damaging property that belongs to the company or a coworker is a serious offense and could even lead to criminal charges.
  • Fraud. This can include falsifying documents, lying to coworkers or customers, or even skimming from company funds. In some industries, such as finance and banking, fraud is tightly regulated, so this is a severe offense that teams should work to proactively detect and prevent.
  • Violating the terms of a contract or agreement. Employees who don't follow the rules or regulations outlined in a contract can be reprimanded and even fired for breaking company policy. One common example is a Non-Disclosure Agreement (NDA), which outlines the confidential information that an employee is not allowed to share.
  • Violating the employee code of conduct. This is another type of policy violation that can encompass any employee behavior that goes against a company’s standards, from inappropriate language to unprofessional attire.

How to Address Workplace Misconduct

It’s important for your HR department to be proactive in addressing misconduct before it gets out of hand, as well as having clear policies for investigating and handling complaints. Here's what you can do to keep misconduct under control, workers feeling safe and valued, and your workplace thriving:

  1. Establish a Clear Policy of Employee Conduct

Having a comprehensive code of conduct is the best way to ensure everyone understands how to act when they're at work. By laying out clear expectations for how your employees should behave in your workplace, you'll set them up for future success.

You can tie your code of conduct to any other important initiatives or policies, such as your Diversity, Equity, Inclusion, & Belonging policy, to reinforce your organization's stance and ensure it's carried out through employee actions. Once code of conduct is created, you can share it in your employee handbook so everyone can access it. This is also the time to outline any other documentation, such as NDAs or employment agreements around workplace safety, data privacy, or fraud, that you expect workers to follow.

  1. Investigate Potential Employee Misconduct

It's important to investigate any reports of misconduct quickly and thoroughly so that you can help resolve conflicts between employees, address performance issues, or prevent any risks to the organization. This means gathering evidence, interviewing witnesses, and talking to the individual directly involved. Follow a clear process for documenting your misconduct investigation and provide a timeline or roadmap for how you plan to handle the situation to those involved.

You can also create a reporting system so that any misconduct can be reported in a timely and organized manner. This will enable you to quickly address the issue and provide clear expectations for how employees should handle situations going forward.

  1. Follow an Established Disciplinary Action Policy

disciplinary action policy helps you determine consequences that are fair, consistent, and effective. Depending on the severity of the situation and the frequency of the misconduct, you have the option of issuing anything from verbal warnings to suspension or termination of employment.

For instance, your policy might outline that excessive tardiness is a written warning for a first offense but eventually will escalate to termination. Or for more serious issues, like fraud or harassment, your policy could outline a zero-tolerance policy that triggers immediate termination.

It's also important to document any disciplinary procedures taken so that there is a record of the incident and applicable consequences. This will help to ensure fair treatment across team members if similar incidents arise in the future.

  1. Build a Workplace Based On Trust

Misconduct can quickly become a major issue in the workplace if it's not addressed swiftly and appropriately. In some cases, high levels of distrust are associated with more rule-breaking, according to the European Journal of Social Psychology. To prevent it from happening, organizations should focus on building a culture based on trust, respect, and clear communication. 

Trust and transparency can also help employees feel comfortable enough to voice their concerns without fear of retribution or judgment. HR professionals can help create a trusting environment by providing resources like an anonymous feedback system or sharing regular communication updates from leadership.

Ensure You’re Supporting Team Members When Misconduct Occurs

Despite your best efforts to prevent it, misconduct can and does occur in every workplace. In cases where the misconduct has a negative impact on the rest of the team, such as workplace bullying or discrimination, the best thing you can do is provide support for the employees affected.

For example, bullying and harassment can often take a huge toll on a person’s mental health. It’s worth looking into whether or not your wellness program offers additional mental wellness resources, and whether you can make these available after a bullying incident. You can also introduce an Employee Assistance Program (EAP) if you don’t already have one, and make sure that team members are aware that they can get immediate help through your EAP.

A robust wellness program can be particularly helpful when it comes to demonstrating your care and concern for your employees if they’ve been impacted by another teammate’s misconduct. In fact, 77% of employees say that they would consider leaving if their company didn’t focus on their wellbeing, showing how much they value psychological safety. 

Learn more about how you can offer support to employees through your wellness efforts by speaking to one of our wellbeing specialists.




Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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