Organizations operate under conditions of imperfect performance in which human error is inevitable, yet errors are rarely examined as the triggers for the managerial interactions that shape organizational culture over time. The present research introduces an agent-based simulation of a work team completing a fixed sequence of tasks under varying degrees of managerial oversight and response policy. The model isolates the mechanical loss of throughput caused by errors from the psychological and cultural consequences of managerial reactions, which are categorized into ignoring, correcting or punishing. Furthermore, the model incorporates an autonomous self-notice mechanism, allowing workers to correct themselves in the absence of managerial intervention. By tracking the accumulation of worker resentment and the transient enhancements in learning, the simulation acts as a dynamic laboratory for observing delayed consequences, nonlinear tipping points and systemic organizational collapse. The results reveal a central paradox of organizational control. Highly monitored punitive environments generate high short-term throughput, yet they simultaneously accumulate interactional injustice and resentment that engineer a rapid cascading turnover and the highest probability of systemic collapse. Conversely, corrective policies combined with active monitoring achieve equivalent throughput while sustaining workforce viability. A comprehensive sensitivity analysis establishes that error accumulation is primarily determined by structural factors, namely agent-level mistake propensity and task difficulty, while resignation dynamics, resentment accumulation and collapse timing remain predominantly governed by managerial policy, a hierarchy independently corroborated by a surrogate model and shown to be stable across independent seeds and across stakeholder weighting scenarios. The study bridges the operational mechanics of task completion and the social dynamics of workplace mistreatment, illustrating how short-term punitive success often masks long-term structural fragility.