The purpose of this paper is to identify reasons for punishing employees, prevalent types of punishment, consequences of punishment, and the factors that determine whether employees are punished for the poor quality of products and services. Design/methodology/approach. The main research method was a diagnostic survey using a questionnaire technique. A personal interview was a complementary method aimed at providing additional data and broaden the extent of research findings. Findings. The conducted research shows that employees are punished mainly when some irregularities occur and are detected (someone does not respect the procedures and standards in force in a given organization). Penalties provided for in-work discipline systems are rar...