Helping Businesses Get Back To Business
Author: Judy Weintraub, Esq.
Conflicts are inevitable in the business world. They arise between individuals, such as between a manager and subordinate or two co-workers, as well as between groups, such as different departments of a company, or between a company and a vendor or customer or governmental agency. If not handled properly, conflicts can be very expensive for a business. If conflicts end up in litigation, the costs are tangible: attorneys’ fees and sometimes pay out of large verdicts to the other party, not to mention the time of any executives or other employees involved in the suit and the disruption to the business.
Even if a conflict does not result in a lawsuit, the costs are very real. Some or all of the following may be present:
—Violence in the workplace
—Theft of intellectual property
—Loss of customers
Studies in the area of workplace conflict show that the number of workplace conflicts as well as the cost of such conflicts are increasing(1). The number of claims filed for employment discrimination, wrongful termination, sexual harassment and ADA violations has increased more than 20% over the last several years. Employers lose approximately 64% of employment discrimination cases, and when they lose at trial, the average verdict is over $600,000. Even when they win, companies are incurring attorney fees to defend themselves in excess of $100,000 per case.
Organizational costs such as work disruption and turnover costs have also been increasing. It is estimated that, on average, over 40% of a manager’s time is spent on resolving workplace conflicts. Employee turnover costs, including recruiting, hiring and training new employees, are averaging between 75% and 150% of annual salary. Reducing conflict in the workplace would thus significantly increase productivity and substantially reduce costs.
Businesses can take various steps to prevent or reduce conflict in the workplace. Not surprisingly, there is a direct correlation between the quality of the work environment and the amount and level of workplace conflict. Conflicts tend to arise more often where employees possess substantial mistrust of management or perceive a lack of respect or lack of fairness in the workplace. Accordingly, improving the workplace environment in these respects is one approach that businesses can take to reduce unmanageable conflicts, and gain many other tangible benefits as well.
An initial step in improving the workplace and preventing conflict is to perform an assessment of the work environment, to determine areas needing improvement. The following is a sample of some of the areas and issues to address in conducting such an assessment.
1. Corporate Culture
a. Are there corporate values? If so, what are they, and to what extent are they prevalent in the workplace? A disconnect between the stated values and corporate behavior can lead to mistrust. The values and behavior should be evaluated for the following types of issues:
—Whether employees are valued as key stakeholders and treated with respect;
—The extent to which employees empowered to make decisions or invited to provide input;
—The extent to which information on strategic plans, corporate goals, and financial or other performance reports shared with employees;
—Whether the values support the conflict management policy
b. Is there an atmosphere of collaboration and collegiality? Collaboration leads to greater understanding and hence better trust and respect. Indications of collaboration in the workplace include the following:
—Employees work in teams;
—Managers receive training in coaching and promoting teamwork;
—Managers share information with their staff and seek their input;
—The organization encourages collaboration in other ways, such as rewards and recognition programs.
2. Employee morale
a. Are there any areas of employee dissatisfaction? The best source for this information is direct input from the employees. If the company has conducted an employee survey, this should be reviewed, as well as any follow-up actions taken by the company to address areas of employee concern. If there has not been a recent employee survey, then employee input can be sought through interviews or focus groups.
b. Another source of information concerning employee dissatisfaction consists of claims, complaints or grievances filed by employees. These should be reviewed to determine any trends and particular areas that need to be addressed.
c. Other indications of employee morale include absenteeism, injury statistics and employee turnover. Company records in these areas should be reviewed for trends as well.
3. Company Policies and Procedures
a.Documentation should be reviewed to determine the extent to which the company has adopted policies and procedures that encourage individual initiative or a collaborative problem-solving approach to conflict resolution, as opposed to encouraging avoidance or power-play resolution. Documents often convey informal messages regarding conflict resolution.
b. Below is a list of some of the types of documents to review:
—Collective Bargaining Agreements and grievance procedures
—Contracts with vendors and customers
—Training courses (e.g., customer service)
—Performance standards and compensation plans
—Strategic plan and Operating Plan
4. Recurring disputes
a. If there are any areas of recurring disputes, these should be investigated to determine why they are occurring, and whether there are any preventive measures that could be undertaken to reduce their occurrence.
b. Sometimes the number and severity of conflicts can be reduced by increasing the skills of managers and/or employees to resolve their own problems.
c. There may also be structural problems (rules, roles, division of labor, decision-making processes, organization of work, geographic dispersal of organizational units, communications systems, etc.) that could be changed in order to reduce conflict(2).
5. Procedures For Handling Complaints Or Disputes.
There are a variety of issues to investigate in this area, to determine whether there is an effective method of resolving disputes as early as possible:
a. How are complaints handled?
b. Are roles, behaviors and responsibilities clearly defined?
c. Has the process been documented?
d. Do employees use the procedures?
e. How quickly are cases resolved?
f. Are employees who have used the mechanisms satisfied with the results?
g. How effective has any training in this area been?
h. How many disputes have been processed through the program?
i. How many of the disputes handled through the program were resolved successfully?
j. How much does the program cost?
After conducting the assessment, the hard work begins, to determine what to do about the various problems that have been revealed. It is useful at this point to charter one or more teams, and to employ a skilled facilitator to help the teams through the process. Teams should consist of from five to nine members, chosen either from the senior management ranks or, preferably, by selecting a cross-section of employees from different areas of the company as well as different levels, such as front line employees and senior managers. Using teams generally produces better results with greater buy-in.
The first step in this endeavor is to review the assessment data, identify all of the problems and then prioritize the list. There are many different ways to prioritize the list. One of the simplest ways is to give each member of the team six points to pick what they regard as the top three issues. Each person gives three points to the issue they feel is most important, two points to the second issue and one point to the third issue. The points are tallied, and the issues that receive the most points are then reviewed. If anyone feels that a key issue has been improperly omitted or that an issue does not belong in the prioritized list, the group discusses whether to include or exclude the issue, as appropriate. The decision can be made by consensus, or by majority rule, or by any other decision method agreed upon by the team.
Once the list has been prioritized, the group can begin to examine alternatives for remedying the problems. It is sometimes helpful to benchmark other companies, to learn what processes or techniques work well elsewhere. Possible remedies would include using a team approach to promote more collaboration, or providing conflict management training, or implementing a multi-tiered dispute resolution program.
Following the brainstorming of alternatives, it is then appropriate to evaluate the alternatives and select the best course of action. The determination of the best course of action needs to take into consideration the resources available, such as employees (or new positions) needed to implement the changes, the cost of implementation, training, information systems needs, and the like. It is likely that the recommendation will need to be approved by some other group, such as the Board of Directors, or the management committee, and thus a formal proposal, including budget and timeline, will need to be prepared to justify the recommended course of action.
Once approval is obtained for the recommended changes, the next step is to develop a plan to implement the remedies. The implementation may be done in two phases: a pilot phase, to test the implementation plan on a small scale, and then the full implementation, after the plan has been tweaked to correct any problems that arose during the pilot phase(3).
Embarking on an initiative of this nature takes firm commitment and visible support from top management and from any unions. For the endeavor to be a success, it also requires a clear understanding of the goals to be achieved, a plan to communicate the changes in the workplace that are implemented, and periodic evaluation of the changes to determine whether the changes are effective and the goals are being met.
Further, it must also be recognized that the work can take significant time and resources. In large companies or agencies this type of effort can take more than a year and require the involvement of key employees for several hours per week. It can be very frustrating and it can be quite a while before positive results become widespread. Those companies that carry through with the effort have found that the long-term benefits substantially exceed the short-term frustrations. Not only will the number and severity of conflicts be reduced, but also costs will be reduced, employee turnover will be reduced, employee morale, productivity, collaboration and innovation will increase and customer retention will increase -- all of which have a beneficial impact on the bottom line and contribute to the company’s success.
(1)“Workplace Conflict: Facts and Figures”, by John Ford, published at http://www.conflict-resolution.net/articles/Ford1.cfm (reviewed on 3/15/01)
(2)Reducing The Costs Of Conflict Through Dispute Resolution Systems Design, by Peter Woodrow http://www.mediate.com/workplace/woodrow.cfm (reviewed 3/26/01)
(3)For a more detailed step-by-step explanation of designing an integrated conflict prevention system, see: Controlling the Costs of Conflict: How to Design a System for Your Organization, by Slaikeu K. & Hasson R. H., 1998, Jossey-Bass. See, also, “Steps for Setting Up an Effective Conflict Management System”, by Tim Hicks http://conflict-resolution.net/articles/hickst4.cfm 12/12/2000 (reviewed 3/26/01); “Core Principles for Federal Non-Binding Workplace ADR Programs” By The Federal ADR Council http://conflict-resolution.net/articles/federaladr.cfm 9/7/2000 (reviewed 3/26/01); and ”Guidelines For The Design Of Integrated Conflict Management Systems Within Organizations” by SPIDR's ADR in the Workplace, Track 1 Committee http://www.spidr.org/article/icmsD.html (reviewed 3/26/01).
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