Business Case #11: Abrasive Personality in the Workplace

Jan is a clerk with a very abrasive personality. She is usually competent but at least once a month she says or does something that seriously offends co-workers or members of the public. Dan, her supervisor, has counseled her several times but concludes she is a negative influence and he wants to terminate her but this is her fourth year and her other three performance reviews give her high ratings. He is confident that if he terminates her she will make trouble, even sue on a trumped up claim. Not wanting to rock the boat he gives her a decent review and decides to live with the problem.
Is this ethical?