Is workplace conflict killing your business?

Organisations that let employee disputes fester in the workplace are destined to pay a high price.

Two decades ago, president and founder of US-based Mediation Training Institute International, Dr Daniel Dana, labelled unresolved employee conflict as the largest reducible cost in organisations, yet one that remained largely unrecognised.

Little has changed since.

A study by workplace mental health organisation SuperFriend reveals that 46 percent of Australian employees prefer to look for a new job rather than contend with conflict in their workplace.

Josh Bersin of Deloitte in the US says the all-up cost of losing and replacing an employee can be 1.5-to-twice the departing employee’s annual salary.

Meanwhile, the Washington Business Journal has reported that typical managers spend 25-40 percent of their time dealing with workplace conflicts – time small businesses can ill-afford.

READ: 3 signs an employee is on the way out

On top of this, conflict distracts employees from otherwise productive use of their time and often leads to poorer decision-making, while many eventually become demotivated by the stress of trying to get along with “difficult” colleagues.

One of the most alarming outcomes (litigation aside) is that stress between co-workers correlates with high absenteeism.

People taking paid sick leave simply to avoid coming to work is not only a direct cost to the business, but may lead to dissatisfied or lost customers.

High time to change tack

“A common trigger for turnover is employees leaving because of badly managed or unmanaged conflict, so it’s time employers managed workplace conflict differently,” said conflict management specialist and Doyle Solutions principal, Andrea Doyle.

“We’re talking about saving serious dollars annually, and for that to happen requires discovering the root cause of the conflict, separating people issues from organisational issues, identifying appropriate short and long-term strategies, implementing them, and a follow-up review.”

The biggest problem with existing approaches to managing workplace conflict – such as investigations and formal grievance procedures – is that none actually focus on resolving the situation, said partner in employment and safety at Page Seager, David Dilger.

“They’re all retrospective – looking backwards to painstakingly accumulate information and then go through each historical issue to find out what went wrong,” he said.

“There’s very little focus on the ongoing relationship of the parties, or everyone around them.”

Interpersonal conflicts may be inevitable but sometimes they need not be bad for business. When properly managed, they can even promote healthy competition and engender positive collaboration.

But not all business owners and managers have the time, mediation skills, or experience to recognise the severity of workplace conflicts before they devolve into a resignation or termination.

Some have the view that employees should take care of their own arguments, but studies show that employees often feel an issue could have been resolved with a better outcome if managers stepped in sooner.

Focus on behavioural drivers

“Take into account the relevant factors [that characterise the issue] and then implement a response action based on that risk assessment,” recommended Dilger.

“Generally, it will require a response within the first 24 hours.”

Too often, attempts to remedy workplace conflicts start with conclusions such as “person X is a bully”, or “person X is a micromanager”.

“Starting off with conclusions without identifying the behaviours that make up these conclusions is fraught with danger,” warned Dilger.

Is it a performance issue where the employees aren’t doing something? Is it a conduct issue where they won’t do something? Is it a capacity issue where they can’t do something, or the result of a significant personality clash?

“Once you have identified the behaviours which allow you to make conclusions, you can start to arrive at an appropriate response action,” said Dilger.

Without trying to understand behavioural drivers, a matter is likely to degenerate into an argument where an employee disputes the conclusion made about them and rationalises it with a conclusion of their own (for example: “No, I’m not a bully, I am just direct, forthright and honest like you asked me to be.”).

“An appropriate response action is all about starting at the right intensity and then building through different ranges as circumstances change,” said Dilger.

After all, there’s no point trying to smash a walnut with a sledgehammer.