Here, the interviewer wants to know your willingness to point out an error made by someone above you, and wants to evaluate how you would handle the situation.
Elements to consider for those who have been in this type of situation (or haven’t yet):
Cite an example. Perhaps you have experienced a situation like this in the past. Feel free to share it with the hiring manager. Avoid petty examples. Choose an example that directly impacted the company’s bottom line.
Don’t ignore it. If you’re 100% sure that your boss is doing the wrong thing, don’t hesitate to tell him the truth. But be careful of your response and your tone. Be humble, but don’t be afraid that your boss could take it out on you. Good managers can take the criticism professionally and usually want to be challenged by their team members.
Erase the negativity. Don’t start with a negative tone upon hearing this interview question. Be humble and acknowledge that your boss is still higher in authority over you. But explain that you’re willing to point out the mistake.
Figure out the best approach. When calling someone out on a mistake, it is better to talk to him or her in private rather than in front of everyone else. Remain professional and discuss the issue in private.
Watch how you speak. You can’t simply call out your boss as if you were speaking your mind. Remember that your boss should be respected, no matter how his decisions affect the company.
You’re not out to get the boss. Don’t act as if you’re police chasing a criminal away. If you’re a professional team player, you don’t want to affect the performance of the team because of a poor decision. Since this is a behavioral question, your answer will illustrate what matters to you the most.
Use the STAR approach. Ace this question by using the STAR approach. S stands for Situation or Task (S-T), the Action you took (A) and the Results you achieved (R). Using this approach will impress your interviewer and make you a star among the other applicants.
No matter how scary the question is, you shouldn’t be intimidated. Prepare an answer ahead of time to avoid skewing the entire interview. Pointing out a mistake isn’t always a mistake. It all depends on just how professionally you handle the situation.