Unfortunately, my employee can't and has refused to apologise. The client has now demanded that I fire or demote the employee, but he's too good to let go. We're a small company and very dependent on this one client, so I can't afford to lose them either. Any suggestions?
This bright employee of yours is a member of the team you're in charge of. I don't know if you hired him, but you certainly allocated him to this client's business. So this enormous cock-up is not in fact his responsibility but yours - and I suspect that your best course of action will become a lot clearer once you accept this reality.
That your client is an important one understandably concerns you, but that shouldn't affect the principle at stake. Your client believes himself to have been badly served - a view you accept. It's therefore up to you to apologise, up to you to make yourself responsible for the future immaculate servicing of his account - and up to you (and not your client) to determine what action should be taken in respect of the unrepentant one.
This is the bit that worries me most. Is the evidence of the cock-up incontrovertible? If so, the unrepentant one's refusal to accept it doesn't bode well for the future. However bright he may be, a blind inability to recognise gross error is unlikely to be confined to this single instance.
You should give him, in writing, just one more chance - but not, obviously, on the same client's business.
If, however, employing every ounce of empathy you possess, you can bring yourself to see his point of view, you should talk him carefully through it, tell him that you've resisted client demands for his demotion or dismissal - and restate your confidence in him. As a normal human being, he may never openly admit to you that he's learnt a lasting lesson; but with any luck, he will have done.
Please address your problems to Jeremy Bullmore at: Management Today, 174 Hammersmith Road, London W6 7JP. Or e-mail: firstname.lastname@example.org Regrettably, no correspondence can be entered into.