Yanfeng Hourly Nonexempt Handbook

CORRECTIVE ACTION

YANFENG has adopted a progressive discipline policy to identify and address employee and employment related problems. This policy applies to all employee conduct that the Company, in its sole discretion, determines must be addressed by discipline. YANFENG takes a comprehensive approach to discipline and will attempt to consider all relevant factors before making discipline decisions. Before or during imposition of a discipline, employees may be given an opportunity to relate their version of the incident or problem at issue and provide any explanation or justification they consider relevant. Most often, employee conduct that warrants discipline results from unacceptable behavior, poor performance or violations of YANFENG policy, practices or procedures. However, discipline may be issued for conduct that falls outside of those identified areas. YANFENG need not resort to progressive discipline, but may take whatever action it, in its sole discretion, deems necessary to address the issue at hand. This may mean that severe discipline is imposed based on the specific behavior and situation. ▪ Verbal Warning: This is a verbal warning that your conduct is unacceptable and that further infractions will lead to more severe penalties. This warning will be documented and placed in your personnel file. ▪ Written Warning: This warning will describe the unacceptable conduct or performance, and specify the improvement needed. This written warning will be documented and placed in your personnel file. ▪ Final Warning with or Without Suspension: The length of the suspension will vary based on such factors as the severity of the infraction, your performance and disciplinary record. You may be suspended for repeated instances of minor misconduct, or for a single serious offense. A suspension will be an unpaid penalty period. A record of suspension will be retained in your personnel file. ▪ Termination: If you fail to improve your conduct or performance, you may be subject to termination of employment. You may also be discharged immediately depending on the severity and specifics of the case. Again, notwithstanding the foregoing progressive disciplinary procedure policy, YANFENG reserves the right to administer corrective actions in such a manner as it deems appropriate to the circumstances, and may, in its sole discretion, eliminate any or all of the steps in the progressive corrective actions procedure. Corrective actions will stay “ active ” for a 12-month rolling period. Where appropriate, a policy of progressive corrective actions will be followed.

If trends in poor working habits or performance continue, you are subject to termination of your employment. By using progressive performance and corrective actions, we hope

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