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Dispute Resolution: Beyond the Open Door in Large Canadian Companies

by Gary T. Furlong
March 1998 Gary T. Furlong

While dispute resolution skills and systems have been a hot topic of discussion in the Canadian legal community for the last few years, it has been unclear how advanced the use of dispute resolution skills is in the Canadian business community. To find this out, a research project was designed and conducted out of the Queen's University Industrial Relations Centre over the last 18 months, with a focus on internal dispute resolution (IDR) systems in medium-to-large non-union companies.

What we found surprised us. The good news is that awareness of the need to have dispute resolution processes appears to be high, every organization we interviewed had a dispute resolution "system" that emphasized resolution at the lowest level, and the executives were quite satisfied with the "systems" that they had.

The bad news, however, is this: the processes implemented and being used are rudimentary at best, there is little measurement or tracking of the system's effectiveness or of parties' satisfaction with the dispute resolution system, there is very little information communicated to employees about how to use the system, management typically retains complete control on the outcomes, and there is little formal training in dispute resolution available to employees or managers.

In short, we found that most companies were focused externally on the highly competitive marketplace they were in, and had made little or no connection between employee effectiveness and productivity and the quality of dispute resolution in their organization.

The High Performance Workplace

This is far more than an academic concern. Given the massive movement by management toward high performance and team-based workplaces in the last 10 years, ignoring the quality of IDR in a company can seriously compromise employee commitment to the success of the organization. A cornerstone of the high-performance workplace is maintaining and enhancing the companies' relationship with its employees. Effective and successful organizations rely on teamwork, employee involvement in problem solving, and a strong climate of cooperation and trust. Empirical data suggests that high-performance environments result in improved financial performance, but to achieve this, the quality of the relationship between managers and employees is critical. Our research was aimed at understanding how companies were managing that relationship.

The Research

The methodology of the project was simple. We chose to do in-depth interviews with 11 organizations that were reported to be focusing on and using some form of internal dispute resolution processes. This was clearly not a representative sample, but rather an attempt to see what organizations purported to be on the leading edge were doing.

The systems in place were very wide ranging. In the 11 companies we interviewed, the systems we found were as follows:

every organization had an Open Door policy, which was identified as the core dispute resolution system in use by most of the sample companies. This process is simply where management encourages employees to meet with and discuss any problems with their immediate supervisors, or any other management personnel. Employees may or may not be required to try and resolve the issue at the lowest level first, before proceeding to a higher level of management.

One organization had a refinement to the open door policy called Senior Management Review. This process consisted of a board or committee of management personnel that reviewed the complaint in a more formal setting.

two organizations included versions of Peer Review, where unresolved issues go to a review panel of five (often called "Fairness Committees), with the majority, typically three members, coming from the employee ranks, and the remainder from management. After holding a formal or semi-formal hearing, the decision of the panel is final and binding on both parties. Typically, Peer Review is reserved for serious issues such as discipline and termination. All employees and managers that serve on Fairness Committees are trained in fact-finding and basic conflict management skills. In many cases, Fairness Committee members themselves serve as informal ombudsmen and conflict resolvers to prevent many issues from reaching the formal panel hearing stage.

one organization formally had a corporate Ombudsman, and another had a company executive that informally functioned as an ombudsman. Typically, an ombudsman is designated to investigate and provide advice and assistance to employees who have concerns or complaints. The office is usually independent, reporting directly to the President or CEO, and acts as a liaison, without formal authority, between management and employees or coworkers to help resolve disputes.

The Findings

A number of trends and patterns emerged from this study that we found interesting. Although all of our companies told us that employee involvement, employee voice, and more effective employee relations were important, the evidence we gathered indicated that this was more rhetoric than reality. A few of the major findings are summarized below:

  • The value and effectiveness of the dispute resolution system is completely unknown. We found two kinds of companies: the first type had only a basic, informal open door policy, and told us that employees were happy with the system, used it, and found it to be both effective and exactly what the company needed. The second type had more elaborate, formal systems (such as Peer Review or an Ombudsman), and told us that employees were happy with the system, used it, and found it to be both effective and exactly what the company needed. Yet neither type of company kept statistics on use of their systems, neither company asked employees if they were satisfied with the systems, and neither company asked employees if they trusted the system to be fair and safe to use. In both kinds of organization, the IDR in use seemed to be more a matter of faith than anything else.

  • In addition, there was a clear aversion to paperwork, and numerous companies stated that they tried to avoid turning dispute resolution into another bureaucracy that needed to be navigated. In at least two organizations, they equated measuring the outcomes with red tape and bureaucracy, which reinforced the lack of data about whether the system was doing what they believed it was.

  • Informal IDR systems, such as Open Door policies, had no written policies, no written description of how the system worked or how to use it, no formal communication to the employees that such as system even existed, and no formal guarantee to employees that they would not be penalized or punished for complaining or using the system. Most companies with Open Door policies relied on the "culture" or on supervisors and managers to informally communicate all of the above to the employees, but no follow-up was done to ensure that this was happening. In general, Open Door policies were largely a matter of habit, and of faith.

In one organization, this "cultural" approach was reinforced strongly by management in one story we heard. There was an incident in one department where break-ins and computer theft occurred more than once. The department had security camera's installed. One week later, two employees from a nearby department were caught on tape breaking in and stealing computer disks and equipment. The company suspended the two employees with the intent of firing them. The department employees intervened, however, and asked management if they could simply discipline and transfer the two employees, rather than terminate them; their feeling was that they were basically good people who made a very bad mistake. Management met with the department, and told them that if they really felt these two should have another chance, they could be moved into their department, and they could work with and supervise the two employees. The department agreed, the two men were disciplined, and became that department's responsibility for a fixed period of time. Stories like this strongly reinforced this organization's "culture" of listening and responding to informal employee input.

Even in this organization, however, there was no information that convinced us that management was consistent with this approach - it was simply a matter of faith. And a number of the companies even lacked anecdotal evidence that the informal system was indeed working.

There was a general emphasis in every organization that disputes should be resolved at the lowest possible level, and this was encouraged, again informally, by all managers. Every organization stated that they encouraged resolution at the front line, but when asked how they accomplished this, none of the companies with only an Open Door policy had specific or direct ways of encouraging this other than sending complaints back down to the front line when they moved up the organization. There was clearly a risk that by discouraging issues from rising past the front line, the message being sent to the staff was simply, "Don't complain".

There was a strong sense that most companies were satisfied with the system that they had. In many cases, this satisfaction rested on the fact that they saw few complaints escalate very far, and that employees seemed to be happy because they had the ability to complain and they didn't. There was little awareness that a lack of complaints can just as likely be the result of a repressive or fearful environment rather than an open and trusting one (perhaps even more likely). But given the sense of satisfaction we encountered, we felt that there was no major interest among these 11 organizations to review or change the systems currently in place. None of the companies felt that the system was broke, so none were considering any fixin'.

Finally, we found that in most of our companies, there is a significant disconnect between the intention and desire for a high-performing workplace, and the quality and effectiveness of dispute resolution in the organization. This was a key finding, in that more than one senior manager told us that they saw no reason to change anything in their "system", whatever it was, because they didn't see many conflicts or disputes. In addition, they saw no reason to talk to their employees to see how it was working for them, for exactly the same reason. A significant "Catch-22" was evident. Until management begins to see a significant connection between the high-performing workplace and the quality and effectiveness of dispute resolution in the organization, little effort will probably be put into changing or improving internal dispute resolution systems.

Summary

The idea of and approach to effective internal dispute resolution systems is at a very basic and rudimentary stage in non-union organizations in Canada. With the significant exception of one organization in our study, a greenfield manufacturing site that built Peer Review into the organization from their inception 12 years ago (and believes strongly it is a cornerstone of their success), most organizations fail to see a link between a high performance work environment, and employees who can access a fair and effective dispute resolution system. Until this link is clearly seen and appreciated, we anticipate little change in the status quo in most non-union organizations in Canada.

Biography


Gary Furlong has extensive experience in mediation, mediation training, alternative dispute resolution, organizational facilitation, negotiation, and conflict resolution. Gary is past president of the ADR Institute of Ontario, is a Chartered Mediator (C. Med.) and holds his Master of Laws (ADR) from Osgoode Hall Law School. As a mediator, Gary has worked in the areas of commercial, personal injury, estates, construction, shareholder, insurance, wrongful dismissal, real estate, and workplace conflicts, and specializes in intervening in difficult organizational and workplace disputes. Gary was regularly called in to the court-annexed ADR Centre in Toronto for the first three years, and has been a Roster Mediator with the Ontario Mandatory Mediation Program, Toronto from its inception to September 2005. Gary is currently available, off-roster, to mediate mandatory cases at his private rate. Gary has mediated personal injury, insurance and long-term disability claims ranging from $30,000 to over $1 million dollars. Estates files include multi-party claims ranging in size from $200,000 to well over a million dollars. Contract and tort claim files have ranged from $10,000 to $2 million dollars. Gary was a regular mediator and fact-finder with the Education Relations Commission, and was also appointed a Provincial Facilitator and mediator with the Education Improvement Commission, assisting with the financial reorganization and amalgamation of school boards in Ontario. Gary is also on the Law Society of Upper Canada complaint mediation panel, and the Teachers College of Ontario mediation panel. Gary has conducted fact-finding and investigations for the past 6 years. Gary is one of the busiest Partnering facilitators to the construction industry, and has pioneered the use of Partnering in unique organizational settings. Gary has mediated a number of construction matters, both construction design and contract issues, along with construction lien disputes.

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Website: agreeinc.com

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