Professional mediator Nicholas Dewar explains how a conflict management system
can cut costs and improve employee relations
Alternative dispute resolution (ADR) is fast becoming commonplace in civil
disputes. Now it is showing up in workplace discrimination disputes. But what
is the point in doing more than an Acas settlement? Experience in the US
suggests that using mediation to manage workplace conflict can drastically
reduce costs and improve the quality of employee relations.
The cost of workplace disputes is increasing because of both the expanding
volume of cases that are filed and the growing value of awards. Similar increased
risks in the US prompted many large employers to adopt comprehensive conflict
management systems. This has earned some big savings for the innovators. Early
in the 1990s companies such as Motorola, Brown & Root and NCR reported
reductions in litigation expenses of between 50 and 80 per cent after
introducing such systems.
The cost savings go far beyond the reduction in lawyers’ bills. The costs of
investigating a harassment claim can exceed £10,000. Add to that the cost of
disruption in the workplace where colleagues are interrogated, departments are
polarised, and the people closest to the investigation have to take sick leave
because of the stress. Then comes the cost of replacing the affected employees,
who often leave, which can reasonably be expected to fall within the range of
75 to 150 per cent of annual salary.
Collaboration is crucial
The innovative conflict management systems that have saved so much money all
incorporate a crucial element that is missing from many modern organisations:
collaboration. Conflict management systems typically rely on three other sturdy
supports: avoidance, power play and resorting to the judgment of a higher
authority. While each of these mechanisms may work at times, the absence of
collaboration can result in expensive lost opportunities.
Collaborative processes encompass a range of possible actions from
negotiations between disputants to mediation using a neutral third party.
Employers often feel that there is already plenty of opportunity within their
organisations for their people to resolve problems collaboratively. But surveys
have revealed that these opportunities, which may be described as open door
policies or various sorts of counselling, are often mistrusted and sometimes
considered to be little more than exit strategies. The collaborative processes
that make such a positive difference to workplace dispute resolution have
significant distinguishing characteristics.
These are that they are entirely voluntary, they can be confidential, and
the parties involved keep control over the outcome of the process. Either party
can leave the process whenever they feel they can do better elsewhere,
negotiation can be conducted in a private forum, and no one else can dictate
how they handle their problem.
For these processes to succeed they must be accessible. This means educating
employees about their availability and their benefits. It also means training
them in the basic skills needed to collaborate in dispute resolution. It means
supporting employees who need help deciding how to handle their disputes, and
it means keeping these processes conveniently near the workplace.
Employers who provide a full spectrum of dispute resolution opportunities
increase the likelihood that disputes will be resolved at an early stage. In
many workplace disputes the principal interest of the complainant is to put a
stop to the harmful activity. Putting in place explicit incremental steps such
as negotiation and mediation encourages employees to use the
lower-cost/lower-risk collaborative alternatives before proceeding to obtain
Mediation holds an especially significant place among dispute resolution
methods because if a dispute goes beyond it the parties must make significant,
expensive and often damaging and irreversible changes to the way they handle
In an adjudicatory process an authority is asked to pass judgment, so each
side must show they are right, and that they have been hurt by the other party
or that the assertions of the other party are wrong. Consequently they need
evidence. During the investigation process their relationships change
drastically. They are now antagonists obliged to paint the darkest possible
picture of their opponent. The only way to obtain relief is to defeat their
In mediation, the process is quite different. The initial objectives of each
party are to fully understand both their own situation and the other’s
perspective. Once they have this information they can, if they wish, find the
outcome that gives them both the greatest possible satisfaction. For this sort
of mediated negotiation, evidence is often unnecessary. After all, the two
parties already know what happened because it happened to them (although they
will have different feelings about the significance of events and actions). Not
only is evidence of little use to disputants, it is also of little value to the
mediator who does not, indeed must not, evaluate the rights and wrongs of the
However, it often happens in practice that the disputants have already
started their investigation and collected much of the evidence that they would
need to present to a tribunal or a judge. In these situations the mediation
process may be slightly different because the parties are then able to begin to
evaluate for themselves, with the support of their legal advisers, the likely
outcome of a tribunal or trial.
With this additional element the parties are, as it is sometimes called,
"mediating in the shadow of the law". Nevertheless, although the
assemblage of evidence may give the parties a better idea of how their cases
might appear to a finder of fact, and may encourage a party who feels their
case is weak to reach agreement without risking a trial or a hearing, it will
probably add very little to the disputants’ understanding of each other’s
perceptions and needs, and therefore will not help much in their efforts to
find the most satisfactory solution.
The need to prove guilt also makes the use of adjudicatory processes
particularly toxic in a workplace environment. The complainant must marshal all
sorts of documents and witnesses. The necessary investigations and interviews
in the workplace often lead to damaging polarisations among employees as the
process effectively obliges them to take sides. The escalation of effort by the
complainant will inevitably be matched by that of the perpetrator.
The battle will almost inevitably destroy whatever relationship remains
between the two former colleagues. Once disputants abandon collaborative methods
there is therefore little hope that the outcome will include their return to
their former workplace. So the use of mediation can avoid the most unpleasant
results of an adjudicated process as well as saving considerable sums of money.
It often happens that disputants who have struggled unsuccessfully to
negotiate a solution feel that no mediator will be able help them. But this has
been proven not to be true. There are many ways in which a mediator can help
disputants overcome obstacles that appear to be impassable, and several surveys
show how disputants feel they have been helped by mediation.
A survey of lawyers whose clients had been obliged to go to mediation by
American courts showed how much mediation can add to failed attempts at
negotiation. Lawyers normally consider themselves to be professional
negotiators, so the findings of the survey are particularly interesting. These
lawyers found mediation was "an improvement on negotiation" for three
reasons: the structure of mediation allows more information to become
available; mediation increases the clients’ sense of participation in and
control over their case; and the setting of mediation permits suspicions and
misconceptions to be cleared up, and, instead of just an exchange of demands,
the explanation of needs, problems and feelings.
So there are clear, economic reasons why mediation makes good sense from an
employer’s perspective. However, mediation is necessarily a voluntary process
and it is therefore essential for it to be attractive to the people on both
sides of a dispute. Studies in the US show most people appear more satisfied by
workplace mediation than by adjudicated procedures. Whereas rates of
satisfaction for litigated cases generally range from 30 to 40 per cent, those
for mediation are reported at between 83 and 99 per cent, and satisfaction with
mediated outcomes ranges from 59 per cent to 75 per cent.
Perhaps even more interesting from the employer’s perspective, preliminary
studies of the aftermath of mediation show it can transform the behaviour of
those involved. Over 90 per cent of alleged perpetrators in discrimination
cases reported that mediation had positively affected the way that they
approached conflict resolution.
As the numbers of people resorting to employment tribunals continues to
increase, it often seems the tribunal process mirrors some of the worst
features of bullying in the workplace. Disputants must endure public
humiliation, are often belittled, degraded and demeaned, and may feel patronised
by the process. By contrast, a properly conducted collaborative process not
only saves money, it also models the sort of conduct that promotes dignity at
Nicholas Dewar is a business mediation consultant and a member of the
Employers’ Law Association working party on ADR