Amargith, your boss sounds like a control freak. There's nothing really to understand there. Control freaks need to feel in control. They don't trust others to do things "right." I've experienced this as a negative trait in some Fe-doms, especially ones under stress, in a bad mood, or just generally unhealthy. Then again, not all control freakiness comes from Fe, it can easily come from Te, or even Fi ...I just think it might be Fe in this particular case.
Punishment for failure to conform can take many forms, etc. seems...a bit harsh and judgemental. It really depends on how far it goes. I mean, if someone is constantly contemplating their navel and won't keep a job, then by all means, kick them in the butt.
But sometimes people need professional help. There is social anxiety, depression, PTSD, and grief to consider in some cases.
Other times there's not even anything wrong - they just are a person who needs more time alone. Period. Trying to change them is crazily counterproductive.