From Guy Kawasaki in early April, The Art of Customer Service:

If you put in a policy to take care of the worst case, bad people, it will antagonize and insult the bulk of your customers.

Read that sentence above 3 times. Put it on your wall. Give it to HR and your CEO. I believe this is a universal truth for both customers and employees. Managing via exceptions creates a negative focus with very people for whom you should be providing value.