The bigger issue is how companies get employees to work in the best interests of the organization. When output metrics are not enough (you care not only that the work gets done, but also about how the work is done), it may be necessary to monitor input (employee behavior).
In this case the CEO sent the employee back for "re-training" which somehow reminds me of "re-education."
In any case, bravo to Checkers for addressing what many call the only issue in management: how to align the incentives of employees with the goals of an organization. When you lack good performance metrics, it may be necessary to create some new ones, like undercover monitoring.