Exception Report

Document performance deviation, develop controls, and improve your standard operating procedures with a mobile app.

Employees discussing exception report|Boss and employee having a discussion|exception report template

What is an Exception Report?

An exception report is an internal methodology used by businesses to formally document the reasons why employees or teams fail to meet work expectations, set targets, and/or deadlines. It is often produced by project managers and team leaders and typically includes a detailed explanation of the different factors that contributed to work deviation.

When is an Exception Report Necessary?

Not all instances of work deviation immediately require an exception report. Minor deviations that do not significantly impact business operations can be dealt with through informal communication between team members and project managers. Exception reports are reserved for particular occurrences where work deviation results in considerable financial loss, poor quality management, project schedule disruptions, and breach of client-provider agreements.

Exception reporting depends on business cases, it acts as a kind of early warning system that alerts the management when the organization is at risk of having discrepancies with key performance targets. It can be provided on a daily, weekly, or monthly basis depending on the organization’s policies.

What Should an Exception Report Include?

Exception reports are needed to analyze and understand different scenarios of why deviation happened. It helps the organization to improve management processes and create actions to be implemented immediately. An exception report should be able to include the following key elements:

  • timeline;
  • objective;
  • up-to-date accomplishments;
  • relevant factors and reasons for work deviation including the stage where it occurs;
  • impact of the problem;
  • evidence (photo or documentation); and
  • recommendations or requests in order to complete the project.

Exception Report: 5 Big Reasons Your Workplace Needs It

Exception reports are customizable, versatile, and highly adaptable. It provides value to just about any business type since it focuses on a general work concept instead of industry-specific elements and solutions.

Below are some important reasons you should start using it for your business:

Develop a flexible work culture

Workers end up feeling stressed and demoralized if they feel that their supervisors and/or managers are too rigid; sticking with set work expectations even after unforeseen circumstances have already made them unrealistic and impossible to fulfill. By letting workers complete an exception report when it is warranted, you give them a fair chance to enumerate and explain the different factors that lead to the delay or failure of their assigned project.

Recognize flaws in your SOPs

By having an internal documentation process through exception reports, you can identify and analyze common factors and frequently cited reasons for work deviation; the first step to creating long-term solutions. They can help you to track, recognize inefficient, faulty, and outdated SOPs so you can discontinue or update them to improve business processes.

Get useful insights from frontliners

Standard operating procedures and major process changes are decided mainly by upper management. Common mistake companies make, however, is the failure to involve frontline workers when creating or updating SOPs. Frontline workers have the most experience utilizing SOPs which gives them a good sense of what works and what doesn’t. Through exception reports, frontline workers can contribute to the improvement of SOPs instead of merely following them.

Improve overall accountability

For some operations, failing to meet work expectations and set deadlines immediately result in written warnings and/or disciplinary actions. By introducing exception reports, however, supervisors and managers create a dialogue with the worker which helps all of the parties involved get better insight into what really went wrong e.g. employee negligence, insufficient resources, etc. so the right solution can be introduced.

Create a database of past mistakes so preventive measures can be taken

Through the organized documentation of work deviation and internal process failures, key stakeholders can use tools and techniques and implement the execution of the appropriate control measures so the recurrence of identified issues can be avoided.

Jona Tarlengco
Article by

Jona Tarlengco

SafetyCulture Content Specialist
Jona Tarlengco is a content writer and researcher for SafetyCulture since 2018. She usually writes about safety and quality topics, contributing to the creation of well-researched articles. Her years of experience in one of the world’s leading business news organisations helps enrich the quality of the information in her work.

Explore more templates

Building Audit Exception Report
Building and property managers can use this building audit exception report to document notable issues regarding building maintenance including current risk levels, likelihood of occurrence, and consequences.
Incident Report Form
An incident report template is a tool used to record incidents such as injuries, near misses, accidents, property damage and more. Use this template to record specific details of the incident and help organizations improve safety and security measures. Make the most of this checklist by following the points below: Identify the type of incident and provide details of the person of injury, job, and hazard/incident Take or attach photo evidence of incident, environment, person(s) involved Gather witness statements and capture a digital signature Sign off with digital signature of person reporting