The Cost of Conflict       
by Julie Denny

While no one likes confrontation with colleagues, clients, staff or managers, conflict is an inevitable part of everyone's workplace experience.

CONFLICT KNOWS NO BARRIERS

• Employee relations disputes erupt over perceived harassment and discrimination

• Peers disagree about respective responsibilities

• Partners have differing views about strategic direction

• Managers are frustrated with staff who don't perform up to expectations

• Freelancers disagree with clients about what constitutes completion of assignments.

CONFLICT CAN COST

Unmanaged conflict is a barrier to productivity and puts companies and employees at risk. Consider the potential costs:

• To prepare for a court discrimination case, companies report spending between $10,000 and $50,000.

• The average jury verdict in wrongful termination cases is more than $640,000 and companies lose 64% of the cases.

• The average award for a sexual harassment case is $38,500; however, a recent judgment against Mitsubishi Motors resulted in a $34 million penalty.

• Turnover costs for an employee today run between 75% and 150% of his or her annual salary.

• Up to 30% of a manager's time is spent dealing with conflict.

• The EEOC received more than 80,000 claims for discrimination in 1997 and another 18,000 for subsequent retaliation

There are many hidden costs to conflict, most never considered in management calculations. They include costs associated with:

• lost time as executives give depositions

• severance

• hiring, including advertising, screening, interviewing

• training of new staff

• reduced productivity

• turnover

• absenteeism

• low employee morale

• customer dissatisfaction as result of depleted, demoralized staff

• lost sales

CONFLICT IS AN OPPORTUNITY

Managed properly, conflict can be an opportunity for clearer communication, better understanding and increased productivity.

Conflict is best addressed at its source. When organizations put structured systems into place to address employee grievances, they are less likely to incur these costs. When employees feel their concerns are heard and their grievances addressed even when change is not always the outcome, job satisfaction increases and as a result, productivity, which goes right to an organization's bottom line.

There are a number of steps to be taken to reduce the risk and improve operations:

1. Establish a written policy governing all types of employee discrimination.

2. Conduct regular training for managers about what constitutes discrimination.

3. Implement a structured grievance process, including informal and formal channels.

4. Respond to grievances promptly and thoroughly.

5. Institute company-wide conflict resolution or communications training.

One of the best ways to implement a grievance process is to set up an internal task force made up of representatives from different levels, different functions and, when possible, different geographical locations. A system designed by such a cross section of employees stands the best chance of being effective, exactly because it is designed by the people who will use it.

As part of the design process, establish criteria for measurement of success. Allow the task force to continue to monitor the system using those criteria as guidelines. Make certain that it is used, effective and fair. Conduct regular surveys and interviews among employees to find ways to improve the system.

Most of all, take conflict seriously. Take steps to address it. Use it as the opportunity it can be for better communication and increased productivity across the board.

Biography     

Julie Denny is an Advanced Practitioner member of the Association for Conflict Resolution, and also is a member of the EEOC mediation panel, a trained US Postal Service mediator, an ADA mediator, working with the KeyBridge Foundation and the Department of Justice, and a Transportation Security Authority mediator, working through the Institute for the Study of Conflict Transformation.

Author's Website: http://www.resolutionsforyou.com