Dispute Resolution: Beyond the Open Door in Large Canadian Companies

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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.