Not only was this employee thinking about something else during the meeting, he must have been thinking about something else after it as well. In a word, he should have come to you immediately to apologize and explain his behavior.
This type of incident has actually become more common recently. Changes in society, the economy, and in many employees' personal financial situations have become serious attention-grabbers. As a result, you should meet with the employee in question to discuss the entire situation, as this level of distraction can be costly for him and the company at large.
Importantly, when you meet with him, the purpose of getting together is not to chastise or punish, but rather to listen, learn, and then determine the appropriate steps. After all, it is possible that he is simply dissatisfied with the job and the time has come for him to make a move or be moved. Or, perhaps he needs more feedback, coaching, and support, or you may even sense a need to refer him for some professional help. In a word, when you find an employee who is not listening, the first step is for you to listen.
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