Employee disciplinary action policy: What to include and avoid

What exactly is a disciplinary action policy?

Simply put, a disciplinary action policy is a formal procedure for addressing employee misconduct, poor performance, and other policy violations. Think of it as your roadmap for consistently and fairly handling workplace problems.

In important ways, this differs from general HR guidelines or employee handbooks. Your handbook might say, “Be respectful to coworkers.” Your disciplinary policy clearly outlines the consequences of violating this rule with an investigative process, consequences that follow, and procedures for appealing decisions.

Without this structure, managers can end up being inconsistent, making decisions based on personal feelings rather than company standards. That inconsistency creates legal vulnerabilities and workplace resentment.

When and why disciplinary action is necessary

Employee disciplinary action becomes necessary when workers violate company policies, fail to meet standards, or create workplace issues. Common scenarios may include:

• Repeated tardiness
• Harassment complaints
• Insubordination
• Policy violations
• Safety infractions
• Performance issues that don’t improve after coaching

The keyword here is “necessary.” Disciplinary action does not need to be the “go to” for every mishap. Rather than resorting to formal discipline, you can coach employees who make minor errors, when there are honest misunderstandings, or when you encounter first-time issues. Your policy should help managers distinguish between situations that require guidance and those that necessitate formal action.

Core goals of a well-written disciplinary action policy

Your disciplinary policy serves three main purposes:

1. Protects your business from lawsuits by establishing consistent, documented procedures.
2. Guides managers through difficult situations so they can make fair decisions.
3. Gives employees clear expectations and chances to improve their behavior.

You protect your business through documentation and consistency. When you follow the same process for similar infractions, you demonstrate fairness, build workplace trust, and reduce discrimination risks.

Manager guidance prevents mistakes. Without clear procedures, supervisors might skip steps, act emotionally, or apply different standards to different people. Employee fairness builds trust and reduces turnover, creating a more stable work environment for everyone.

Key elements to include in your disciplinary action policy

Every effective policy should consist of several core components.

• Start with clear behavior expectations that reference your employee handbook or code of conduct. If you don’t have one yet, consider creating an employee handbook that outlines policies alongside other workplace standards
• Include your investigative process explaining how you gather facts, interview witnesses, and review evidence before taking action. Define your progressive disciplinary steps. Most policies follow  a progression from verbal warning to written warning to suspension and, finally, termination. Specify which infractions, such as harassment or safety violations, may be serious enough to warrant skipping some of these steps
• Implement appeal procedures that allow employees to challenge decisions they believe are unfair. Securely store documents and limit access to protect employee privacy while maintaining necessary records

Let’s learn more about a common policy that employers put in place.

The progressive discipline model: Step by step

Before facing termination, progressive discipline provides employees with multiple opportunities to correct their behavior. The standard progression moves through four levels, though you may skip steps for serious violations.

• Verbal warnings address minor first-time issues through informal conversations. Document these conversations with dates, witnesses, and specific behavioral expectations
• Written warnings formalize the disciplinary process for repeated or more serious infractions. Place these in the employee’s file and clearly state the consequences for continued problems
• Suspension temporarily removes the employee from work, usually without pay
• Termination ends employment for continued violations or serious misconduct. Some infractions entirely bypass this progression  Violence, theft, harassment, and safety violations often warrant immediate termination

In some cases, you might need to implement an employee performance improvement plan before moving to suspension or termination. This gives employees clear goals and timelines with a structured path to improvement.

Also, here are the progressive discipline steps outlined about in a table that you can also use for reference.

Verbal versus written warnings: When to use them

Verbal warnings work best for minor infractions or first-time policy violations. Examples include occasional tardiness, minor dress code violations, and casual unprofessional language. Hold the conversation in private, be specific in regard to the problem, and going forward, make sure expectations are clear.

Written warnings escalate the process for repeated issues or more serious violations. Use written warnings when verbal coaching hasn’t worked, when the behavior affects other employees, or when company policy specifically requires written documentation.

Remember that even verbal warnings should be documented in your notes. Record the date, specific issues discussed, employee responses, and improvement expectations.

How to properly investigate and document issues

According to the EEOC, employees don’t report most workplace harassment, which makes proper investigation procedures even more important when issues do surface. After learning about potential misconduct, immediately start your investigation.

Separately interview all relevant parties to avoid contaminated statements. Start with the person reporting the issue, then speak to the accused employee, and, finally, interview any witnesses.

Stay neutral throughout the investigation. Your job is to gather facts, not make judgments about who is right or wrong. Document everything in writing. Your investigation file should include interview notes, evidence collected, a timeline of events, and your conclusions.

Some situations require outside help. Consider involving legal counsel for harassment complaints, safety violations, or potential criminal behavior

Consistency is key: Training managers to fairly apply policies

Manager training helps prevent favoritism and bias which can create legal problems. All supervisors should understand your disciplinary policy and consistently apply it across all employees. Train managers to distinguish between personal feelings and disciplinary decisions.

Provide managers with clear examples of how to apply your policy. Create approval processes for serious disciplinary actions. Require an HR or senior management review before suspensions or terminations.

Track organizational disciplinary actions to identify patterns. If one manager gives significantly more or fewer warnings than others, investigate whether they are consistently applying standards.

Legal risks to avoid and how to stay compliant

Retaliation claims now account for 47.8% of all EEOC charges, making them the most common workplace complaint. Be careful about timing when disciplining employees who have recently filed complaints, reported safety issues, or engaged in other protected activities.

Discrimination lawsuits often stem from inconsistent discipline policies. When similar violations result in different consequences based on the employee’s protected characteristics, you create legal liability. Document your decision-making process to demonstrate the business reasons behind disciplinary actions.

Wrongful termination claims can arise when you skip your own policy steps or fail to follow proper procedure. If you decide that situations warrant employment separation, having clear documentation and following proper procedures makes handling employee termination smoother and legally defensible.

State and federal labor laws add complexity to disciplinary procedures. Research your local employment laws or work with an employment lawyer to ensure that your disciplinary policy complies with state and federal requirements. Each state has different rules regarding documentation, final paychecks, and termination procedures, which can create legal complications.

Disciplinary actions that could backfire

Acting emotionally during disciplinary situations can create problems that persist long after tempers cool. Take a moment to steady your emotions and gather the facts before addressing serious violations. Vague expectations set employees up for failure and create disputes about whether the employee has improved.

Skipping documentation may seem like a time-saver, but it can later lead to problems. Without written records, you can’t prove patterns of misconduct or show that employees had fair warning about consequences.

Public discipline can embarrass employees and damage team morale. Privately handle all disciplinary conversations to maintain dignity and prevent workplace drama.