Every year, workplace conflicts cost U.S. employers a staggering $359 billion in paid working hours. This is due to the fact that most employers spend almost three hours of their workweek handling conflicts. Apart from the obvious financial repercussions, there are several more consequences.
Think in the lines of absenteeism, poor engagement, high turnover rates, and possible litigation. Any of these can be disastrous on its own, and a combination of them can drag your business down the drain. For these reasons, we’re going to address the best dispute resolution methods.
Read on to learn.
1. Importance of Dispute Resolution Skills
Dispute resolution, also known as alternative dispute resolution or ADR, is one of the most essential skills to possess as a CEO or business owner. You see, with human beings being emotional creatures, conflicts are bound to happen due to disagreements. Regardless of whether it occurs between employees, business partners, shareholders, or unsatisfied customers.
2. What Is Alternative Dispute Resolution
Alternative dispute resolution refers to a range of various processes used to resolve conflict in the workplace. Some of these alternative dispute resolution examples include mediation, arbitration, fact-finding, and conciliation, to name a few.
One of the best things about these processes is that involved parties have control over the situation. Issues are resolved a lot faster compared to the alternative, which is litigation.
3. Everyday Situations Where Dispute Resolution Is Necessary
You may not know this, but employee and managerial conflicts are usually among the top reasons employees leave their jobs. This means that an unresolved conflict can set you back as an employee, and you would need to rehire and retrain somebody new. Dispute resolution is essential when the conflict takes your managers or employees away from their core mission.
It’s vital that you deal with the conflict before it starts wasting time, poisoning relationships, and costing money. As an astute business owner or CEO, you need to seek advice from your HR department or legal counsel. Do it before things get out of hand, relationships are jeopardized, and jobs are lost.
4. What Business Owners Should Do to Proactively Reduce the Risk of Conflicts
The first thing you have to understand is that conflict is a part of any work environment. There’s simply no way of helping. You should also know that avoiding conflict is not a solution, so you need to find a way to proactively reduce the risk.
As a smart business owner, you should embrace conflict. Create a culture that addresses conflict early before escalation. Encourage your managers and staff to resolve issues at the lowest level.
Bring in the skills and characteristics of a mediator to solve challenges before they become formal. When dealing with shareholders and suppliers, it’s prudent to have resolution language embedded in your documents.
Address how you intend to resolve disputes when projects or deals fall apart. When you have a solution even before the project commences, you have a higher chance of preserving your relationships.
Usually, formal contracts have arbitration as a dispute resolution. However, it can be expensive, so it’s better to start with the most basic conflict resolution strategy, which is mediation.
5. What Are the Best Dispute Resolution Methods?
Let’s discuss some of the best alternative dispute resolution methods. Let’s start off with mediation. Mediation is a dispute resolution process where a neutral third party facilitates communication.
In mediation, both parties are allowed to resolve the dispute themselves and develop options that will help them move forward. This is one of the most flexible dispute resolution processes.
You can go to a dispute resolution center if you’re unable to handle the case yourself. You can also opt for dispute resolution management such as hcp spend solution, depending on your type of business.
Arbitration, on the other hand, is quite different because it’s like a private court. An arbitrator serves the same purpose as a judge.
They issue the dispute based on the contract or law that established the conflict. Generally, arbitration is binding and final and can ultimately be very expensive, just like litigation.
6. Top Conflict Resolution Strategies: Step-By-Step Guide
How you defuse the situation that will make all the difference. Both parties may be angry or going through other emotions that make them unresponsive and rational. You have to be the one to strategically resolve the situation and we have a guide for you.
Define Acceptable Behavior
From the word go, it’s important to define acceptable behavior in your company, so you can avoid potential problems right off the bat. Give your employees room to define what may or may not be appropriate and what is and is not acceptable.
However, as the business owner or CEO, you need to go the extra mile and set the tone. Start by writing specific job descriptions and note the hierarchy of responsibility. Define proper business practices, create a framework for how projects are run, etcetera.
Don’t Avoid Conflict
At some point, it may be necessary to ignore conflict and let the participants work it out between themselves. However, ignoring or avoiding the conflict because you don’t want to reprimand someone is a misstep. If the conflict becomes a confrontation, you will have an even bigger problem.
Listen to Learn
One of the most vital dispute resolution strategies you can adopt is listening to learn. When you are trying to understand the conflict, resist the urge to interrupt.
Ask questions that draw out the core issues. It’s only after you get the sense of each party’s perspective that you’ll have the power to present your own point of view and ultimately a solution.
Start With a Compliment
When addressing the issue, avoid jumping into the conversation with an accusatory tone. Once you have actively listened to both parties, start by complimenting them. This strategy is aimed at showing them that there’s no good or bad person and what you are attacking is the problem and not necessarily the people.
Think Opportunistically and Avoid Jumping into Conclusions
Some conflicts will come off as obvious but during the conflict resolution, avoid jumping to conclusions. Some conflicts will require consequences for one or both parties.
Still, take this opportunity to learn about any underlying issues. Consider offering guidance instead of solutions to avoid taking sides. By all means, avoid criticism and intimidation.
Dispute Resolution: Everything You Need to Know
Now that you know what dispute resolution is all about, you’re in a better position to solve conflicts in your business. There are many ways to solve conflicts before you consider going to a dispute resolution center or to court.
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