I think there is this temptation with some community owners and administrators to select moderators and then not monitor them closely; to let them do what they think is appropriate without any sort of review of those actions.
Whether they are volunteer moderators who help out for a few hours a week or paid moderators for whom it is a part time or full time job, you can't set and forget them.
This post was inspired by a comment by Rebecca Newton on the e-mint list.
Think of a restaurant. You have servers and they interact directly with your customers. They are front line representatives and have a powerful ability to directly impact how the customer thinks of your business. Not just in how they act, but in how they communicate things that are out of their control.
As an example, let's say that the kitchen is slow. That's probably not the servers fault. But, in how they choose to communicate that problem, they can impact how the guest feels about it. If they communicate quickly, explaining that there is a delay and apologizing for it, that will probably win points with the customer. If they communicate slowly, force the customer to ask them about their food or make some sort of derogatory comment about the kitchen, that will probably make the customer less likely to return in the future.
Unless you are a heavy gambler, that likes to bet when the odds are stacked against you, you would never send servers out to interact with customers without training and oversight. Yes, sometimes an angry customer will ask to speak to the manager, but by that time, the damage may have already been done. For everyone who asks for a manager, there are others who simply leave quietly, never to return. As much as possible, you want to get it right the first time.
The exact same thing is true for your moderators. That's why it is important to not only select people carefully, but to train them, encourage them to ask you questions and to monitor their actions, politely and kindly correcting where needed.
If they remove content, you should know why. If they ban someone, you should know who. If a member responded to them in a rude way, they should tell you. If something is wrong, you should fix it.
Even with training, you can't simply let things go unmonitored. That's how inconsistencies happen – that's how each moderator starts moderating in their own way, rather than in a consistent way as part of a team. You need to have someone who is watching over the actions and can look at them with enough long term perspective to see what is consistent and what is not.
Having moderators doesn't mean you, as the administrator, don't have to be involved in moderation any longer. It just means that your role in moderation changes. You should still handle violations if you see them. But, your role now shifts more toward ensuring the highest quality level of moderation possible.