Managerial Ethics 1

[impeller1]

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..

 

[Ron]

My apologies eleceng01....didn't mean to repeat something you had already said!

 

[photoengineer]

Impeller1,

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.

 

[Eleceng01]

Ron, no apologies necessary - I am glad that others agree with my opinion!

 

[BigInch]

Go for the throat, but only after carefully documenting the situation and notifying the CO by registered letter, how it really went down, why the company's solution was wrong, what he needs the company to do to make it right and a reasonable time deadline to make it happen. He should not walkout if at all possible. Simply continue to do his job as best he can until it is rectified one way or the other is the appropriate action IMO. If the company does not make it right within the reasonable time specified in the letter, go for it.

**********************
"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/

 

[plasgears]

I enjoyed my job in plant engineering, and making general purpose contracts helped take care of miscellaneous jobs. I had a number of trusted contractors who routinely did big and little jobs for us, and they charged against the open maintenance contracts. This solved the problem of figuring how much to charge. Contractors sometimes estimate/charge too much to cover contingencies. Charging against open accts is convenient for everyone.

 

[ajack1]

I totally agree with you plasgears, but it does involve a good amount of trust from both parties. I am not sure I would want to trust the person described in the OP.

 

[plasgears]

ajack1,
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.

 

[msquared48]

I am sure that your manager was operating as an agent of the company when that decision was made. That would place the liablilty for the bill on the company, not him.

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

 

[MedicineEng]

Just my 5 cents:
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.