I am the company owner. I had the bizarre experience of net productivity going UP by firing the warehouse manager. Apparently he had the habit of telling the same long-winded story to each of his 8 co-workers, individually.
Once he got done telling them all about the strawberries that were 50 cents a pound underpriced at Safeway, `15 minutes later they could get back to work. He not only wasted his time, but also his co-workers.
Productivity noticeably went up after his departure. Nobody had complained about his time wasting stories until AFTER he left. Somehow they assumed I knew everything but didn't care (bizarre, since I am fairly frugal) .
So as the Boss in this scenario, sometimes it is hard to tell what the truth really is. My staff was trying to be nice, and not cause problems in the workplace. Thus causing a problem in the workplace.
Occasionally I do the Toyota 'stand in a circle' exercise in the factory to get a real sense of how people move around, how they spend their time. It is always surprising how my assumptions are often wrong.
http://theleanthinker.com/2007/07/09/the-chalk-circle/
I also watch for the "delegate to peers" routine. If I assigned it to you, I wanted YOU to do it. If I wanted your co-worker to do it, I would have assigned it to THEM.