A microcomputer-based program for collecting and monitoring data on medication-dispensing errors made by pharmacy personnel is described, along with the policies and procedures for dealing with the responsible employees. The program was implemented at a 964-bed teaching hospital. When a medication-dispensing error is suspected, the director of pharmacy initiates a medication discrepancy follow-up report form. The appropriate supervisor fully investigates the incident, completes the form, and returns it to the director, who assigns a point value to the error on the basis of whether it injured or had the potential to injure the patient. Information from the report is then entered into an automated file. Data are sorted by the computer, allowing the performances of pharmacy personnel to be monitored. Progressive educational or disciplinary actions are taken depending on the number of points accumulated annually. Responsibility for an error is not assigned unless there is absolutely no question as to its origin, and dispensing-error points are not carried over from year to year. Since the program was implemented more than three years ago, the average number of reported medication-dispensing errors has decreased from 20 to 6 per month. Departmental procedures for monitoring and analyzing dispensing errors and for initiating disciplinary actions against personnel who commit many dispensing errors have been successful in creating greater awareness of the need to prevent such errors and in reducing their number.