Integrated Conflict Management Systems Management Conflict Integrated

Home , Conciliation, Dispute Systems Design

Introduction to: Employee Dispute Resolution Programs

PRODUCTIVITY

COSTS BUSINESSES BILLIONS OF DOLLARS IN LOST LOST IN DOLLARS OF BILLIONS BUSINESSES COSTS

WORK‐RELATED CONFLICT CONTINUES TO RISE AND AND RISE TO CONTINUES CONFLICT WORK‐RELATED

THE NUMBER OF EMPLOYEES SEEKING HELP FOR FOR HELP SEEKING EMPLOYEES OF NUMBER THE •

CONFLICT

HOURS/WEEK DEALING WITH SOME TYPE OF OF TYPE SOME WITH DEALING HOURS/WEEK

HOURS/WEEK, AND 10% OF EMPLOYEES SPEND SIX SIX SPEND EMPLOYEES OF 10% AND HOURS/WEEK,

ON AVERAGE, EVERY EMPLOYEE SPENDS OVER TWO TWO OVER SPENDS EMPLOYEE EVERY AVERAGE, ON •

THE STATISTICS STATISTICS THE

employee departing

turnover, costing 70‐150% of annual salary for each each for salary annual of 70‐150% costing turnover,

voluntary employee turnover and 90% of involuntary involuntary of 90% and turnover employee voluntary

Unresolved conflict is a decisive factor in 50% of of 50% in factor decisive a is conflict Unresolved •

THE STATISTICS STATISTICS THE

DISTRACTION

3‐5 YEARS TO RESOLVE, AND SERVE AS A MAJOR MAJOR A AS SERVE AND RESOLVE, TO YEARS 3‐5

INTO A LAWSUIT CAN EASILY COST $100,000, TAKE TAKE $100,000, COST EASILY CAN LAWSUIT A INTO

AN EMPLOYMENT COMPLAINT THAT ESCALATES ESCALATES THAT COMPLAINT EMPLOYMENT AN •

THE STATISTICS STATISTICS THE

Sample Employment Class Actions

Company Settlement Allegation

UBS $30 million Gender discrimination

Wal-Mart $173 million Wage and hour

Red Lobster $9.5 million Wage and hour

Morgan Stanley $53 million Gender discrimination

Ralph’s Grocery $30 million Sexual harassment

Rent-A-Center $47 million Gender discrimination

AMEX $31 million Gender/age discrimination

Coca-Cola $192.5 million Race discrimination

Texaco $176 million Race discrimination

Home Depot $65 million Gender discrimination

Publix $81.5 million Gender discrimination

EMPLOYMENT-RELATED DEVELOPMENTS

• Emphasis on being proactive/dispute avoidance • Increased litigation and litigation expenses/costlier settlements • Protracted conflict • Increased interest in utilizing HR programs to improve PR • Recent court decisions affirming continued support for ADR • Increasingly diverse workforce • Globalization • EEOC mediation “refer-back” program and other programs • Six Sigma and other quality-initiatives • More organizations seeking alternative solutions and new definitions of “success” and “win” in HR and legal environment

4. Interest Based instead of Rights Based Rights of instead Based Interest 4.

Organization Entire of Effort Collaborative 3.

Preventitive Proactive/ 2.

Systematic 1.

Conflict: to Approach •

Alternative Disputes Movement into Corporations into Movement Disputes Alternative

•

conflict Management system Design system Management conflict “ ”

of BiRth 1990s

After Action Review Programs Review Action After

•

Early Case Assessment Programs Assessment Case Early

•

Systems Warning Early •

Systems Management Conflict Consumer •

Employee Dispute Resolution Programs Resolution Dispute Employee

•

INTEGRATED CONFLICT MANAGEMENT SYSTEMS MANAGEMENT CONFLICT INTEGRATED

A Progressive Approach to Conflict Management •Prevent and eliminate all litigation costs and fall-out.

•Create a more productive workplace:  Managers and Leaders focus on driving value added services  Teams operate effectively and efficiently to deliver services  Individuals support customer needs

Increased revenues and profits to sustain a competitive advantage

9 Interest-based Conflict Management Systems Design (Costantino and Merchant, 1996)

• Merge organizational development, dispute systems design, and the interest-based concepts of ADR to create effective conflict management systems • Conflict management systems v. dispute resolution programs • A more systemic approach with a focus on stakeholders • “If you build it, they may or may not use it. If they build it, they will use it, refine it, tell their friends about it, and make it their own.”

What is an Employment Dispute Resolution Program?

A systematic approach within an organization to provide employees and the organization with a variety of processes outside the existing, formal judicial system to resolve employment related disputes. Such programs lend consistency and manageability to the handling of workplace issues while saving time, money and other valuable resources.

11 Employment ADR Programs vs. Litigation ADR Litigation Avg. Cycle Time to Resolve 3 months - 1 year 1 - 3 years

Avg. Outside Cost to Resolve $2,000 - 30,000 $35,000 - 250,000

Confidentiality Private Public

Trier of Fact (w/arbitration) Experienced Neutral Jury

Degree of Control High Low

Avg. Settlement Cost $5,000 - 25,000 $15,000 - 195,000

Participant Satisfaction Level Medium/High Low/Medium Class Action Experience None to Low None to High Charge and Lawsuit Volume Low Low to High

Source: Compilation of Client and Public Information (1993 - 2012)

for the company because the process is confidential. is process the because company the for press bad Prevents

• ” “

employee relationship. employee - employer

Produces more cooperative and creative solutions, preserving the the preserving solutions, creative and cooperative more Produces •

issues. the assess

for the employee to resolve disputes and opportunities for the company to to company the for opportunities and disputes resolve to employee the for

Leverages the strengths of any current process by creating more options options more creating by process current any of strengths the Leverages •

economically.

Saves time and money by resolving disputes quickly, fairly and and fairly quickly, disputes resolving by money and time Saves •

jury awards, and class and awards, jury actions. -

Litigation Prevention System Prevention Litigation a Creates to eliminate large settlements, settlements, large eliminate to • “ ”

Employee Dispute Resolution Program: Resolution Dispute Employee

to Design and Implement Implement and Design to Reasons

Program Benefits (cont.)

• Control process/minimize uncertainty and maximize uniformity

• Decreased turnover

• Improved company decision making

14 What organizations have programs?

15 Statistics Support Earlier Resolution and ADR

Companies utilizing a collaborative approach to dispute resolution and mediation on a systematic basis report tremendous time and cost savings, usually millions of dollars in settlement costs alone – GE has reported upwards of $15 million per year in cost avoidance through its Early Dispute Resolution System. – Toro’s Early Intervention Program saved the company $50 million in its first six years. – Georgia-Pacific saves $3.5 million in legal fees and related costs each year. – Motorola reported a 75% reduction per year over six years in outside litigation expenses by using a systematic approach to conflict management – NCR reported a reduction in outside litigation expenses of 50% and a drop in its number of pending lawsuits from 263 to 28 over a 10 year period, following the systematic use of ADR

Employment Dispute Resolution Programs: An Overview

17 Goals of a Program

To Prevent or Resolve Disputes at 1. the earliest possible time, 2. the lowest possible cost, and 3. with the most informal interest-based process as possible.

Primary Dispute Resolution Methods

• Rights-based methods are grounded in fixed rules or principles (litigation, binding arbitration)

• Interest-based methods allow parties to identify their concerns, needs, and desires as a starting point in addressing the issues in dispute (mediation, facilitation) Dispute Resolution Continuum

Rights Based RIGHTS BASED Interests Based& INTERESTS Adjudicative Conciliatory Litigation Mediation Arbitration Conciliation Negotiation • most formal • most adversarial • least party control • least formal • least adversarial • most party control Evaluative Summary Jury Trial Mini Trial Early Neutral Evaluation

• formal & adversarial • parties retain control

20 Distressed System v. Effective System

Rights

r Rights

Interests

Effective System Distressed System

21 Sample Employment Dispute Resolution Mechanisms ...

• Open Door • Mediation • Negotiation • Mini-Trial • Facilitation • Case Evaluation • Ombuds • Arbitration • Fact-finding • Private Judging • Peer Review

22 Open Door Policy

Supervisors, Managers and CEO all leave their office door “open” in order to encourage openness and transparency with the employees. Employees are encouraged to stop by whenever they feel the need to meet and ask questions, discuss suggestions and address problems or concerns with management.

23 Negotiation A method of exchanging interests and proposals through direct communication. •Positional-based negotiation: driven by the assessment of desired outcomes and the iterative exchange of those outcomes towards a compromise. •Interest-based negotiation: driven by the parties’ ultimate commercial objectives and the exchange of proposals for obtaining those objectives in the context of the other parties’ interests. 24 Facilitation

Some programs include a “Facilitation Office”. The Office oversees administration of the program and can be the touch point to guide employees through the various processes. However, the “Facilitator” can also help facilitate discussions between management and the employee. Sometimes discussing the problem with the “Facilitator” is enough.

25 Ombuds An organizational ombudsman (1) works with individuals and groups in an organization to explore and assist them in determining options to help resolve conflicts, problematic issues or concerns, and (2) brings systemic concerns to the attention of the organization for resolution. Operates: 1. confidentiality 2.maintains a neutral/impartial position 3.works at an informal level of the organizational system, and 4.independent of formal organizational structures.

26 Fact Finding A neutral fact finder conducts an independent investigation into the cause of the disagreement. The fact finder will interview both sides, gather additional information, and then present findings and possible solutions to the parties. The findings and recommendations are not binding but are incorporated into the negotiations between the parties and their counsel. The fact finder usually does not directly participate in the negotiation process.

27 Peer Review Employee takes a dispute to a group or panel of fellow employees and managers for a decision. The decision is not binding on the employee, and s/he would be able to seek relief in traditional forums for dispute resolution if dissatisfied with the decision. Typically, the panel consists of employees and managers who volunteer for this duty and who are trained in listening, questioning, and problem-solving skills as well as the specific policies and guidelines of the panel. 28 Mediation Mediation is facilitated negotiation, whose object is the consensual resolution of a dispute on terms that the parties themselves agree upon. •A neutral party (a mediator) •Seeks to determine the interests of the parties. •Communications strictly confidential •If competent may eventually (1) offer an opinion /or (2) offer a proposed “best resolution” •No authority to impose an outcome on the parties and controls only the process of the mediation itself, not its result.

29 Mini Trial A hybrid process by which the parties present their legal and factual contentions to a panel of representatives selected by each party, or to a neutral third party, or both. The presentations are strictly limited and, at the end of the presentations, the party representatives and/or neutral meet and confer. The utility of the process is to provide senior party representatives with an opportunity to balance the strength of their client’s claims against the contentions of their adversary, with an eye to resolving the matter on commercial rather than legal terms.

30 Case Evaluation

Provides disputants with a frank professional evaluation of their claims and defenses by a professional, objective observer. It is used when the parties disagree significantly about the value of their cases and are locked in positional bargaining. Case Evaluation benefits the parties by adding to the negotiation certain assessments whose neutrality may lend them authority and utility, without changing their positions or interests. 31

Arbitration A voluntary adjudicative method of dispute resolution in which an independent, impartial and neutral third party (an arbitrator or arbitral panel) considers arguments and evidence from disputing parties, then renders a decision or award. • may be binding or non-binding, • levels of procedural formality vary • the powers of the arbitrator and the conduct of the arbitration process are determined by the parties at the time of their agreement. • In the absence of an agreement to the contrary, arbitral awards cannot be judicially appealed except on very limited statutory grounds.

32 Private Judging

Stands midway between arbitration and litigation in terms of formality and control of the parties. In private judging the parties present their case to a judge in a privately maintained courtroom with all the appurtenances of the formal judicial process. Judges who sit for private judging are mainly retired or former public judges who are having subject matter expertise. This approach is gaining popularity in commercial situations because disputes can be concluded much quicker than under the traditional court system. It is also called as rent-a-judge. 33 Categories of ADR Options

Preventive ADR - ADR Clauses - Partnering Imposed ADR - Consensus building - Binding - Negotiated rule making arbitration - Joint Problem Negotiated ADR solving - Principled - Positional Advisory ADR - Problem solving - Early neutral evaluation - Private judging Facilitated ADR - Summary jury trials - Mediation - Minitrials - Conciliation - Nonbinding arbitration Fact-Finding ADR - Ombudsperson - Neutral expert fact finding - Masters - Magistrates

Costantino and Merchant, 1996. 34

MAPS

EMPLOYEE DISPUTE RESOLUTION PROGRAM PROGRAM RESOLUTION DISPUTE EMPLOYEE

SAMPLE

UBS PaineWebber F.A.I.R. Program Overview

Option 1 Option 2 Open Door Issue Resolution Office

Option 4 Option 3 Arbitration Mediation

36 Sample Employment Dispute Resolution Program Process Map

Roads to Resolution 37 Resolve employee Problems System’ Game plan

Employee Min Problem i Tria Facilitator “Coaches” employees on how to use the l system to get their problems resolved.

38 Employee Contacts: Work-related Issue Arises Open Door Policy * • Supervisor No • Manager Further • Human Resources If Resolved Action • Ethics & Compliance Help Line

If Unresolved No SHARE Further Program Office If Resolved Action

If Unresolved

No Further Mediation Action If Resolved

If Unresolved

Arbitration

39 Pathways Employee Relations at J&J

O P E N D O O R F A C I L I T A T I O N M E D I A T I O N

Common Ground Comprehensive & Collaborative

40 Common Ground Overall Results Pathways

O P E N D O O R F A C I L I T A T I O N M E D I A T I O N

•Majority of facilitations closed successfully •Less than ¼ facilitations sent to mediation •Majority of mediations closed successfully

41 Design Elements Essential to a Fair System

• Participation in a system should be voluntary • The privacy and confidentiality of the processes should be protected to the fullest extent allowed by law • Neutrals should be truly neutral and impartial • Neutrals should be adequately trained and qualified Design Elements Essential to a Fair System (cont.)

• Diversity in the program’s neutrals and accessibility for the disabled should be emphasized (program must be perceived as legitimate, inviting, and accessible to all stakeholders) • A system should have policies that specifically prohibit any form of reprisal or retaliation • A system must be consistent with an organization’s existing contracts (collective bargaining agreements, etc.) • A system must not undermine the statutory or constitutional rights of the disputants

management conflict

Developing core organizational and leadership competencies in in competencies leadership and organizational core Developing •

the hiring of employees or the first contact with consumers. with contact first the or employees of hiring the

Relying on prevention as a key part of the program, beginning with with beginning program, the of part key a as prevention on Relying •

disputes

Considering conflict as a whole, instead of matter of instead whole, a as conflict Considering specific and single single and specific - •

the stakeholders, not the consultants. the not stakeholders, the

ultimate responsibility for the System’s success lies with with lies success System’s the for responsibility ultimate the that So •

stakeholders: the with

To create an Integrated Conflict Management System (ICMS) as part of a team team a of part as (ICMS) System Management Conflict Integrated an create To

Systems Design Design Systems bjectives O

of the specific organizations organizations specific the of ” culture conflict “

Should develop a customized system only after full assessment assessment full after only system customized a develop Should •

decision every in

key stakeholders are to be involved every step of the way and and way the of step every involved be to are stakeholders key

Understanding that they are managing the design process, but process, design the managing are they that Understanding

•

lawyers often Law, Employment of Understanding •

Strong Organizational Development Skills Development Organizational Strong

•

Strong Program Management Skills Management Program Strong

•

Alternative Dispute Resolution Background Resolution Dispute Alternative

•

“ ” Designer Systems

Program Design, Implementation, and Administration Methodology

Needs Analysis

Program Recommendation

Program Documentation

Program Communication

Education and Training

Tracking, Reporting and Evaluation

Program Administration

46 Pulling It All Together: The Conflict Pyramid

Litigation Management Risk Counsel evaluation of Dispute lawsuits Management Human Resource Dispute resolution managers methods

Conflict Management

Shared management and Everyone prevention What is the system? Who is responsible? How is it done?

Lipsky, et al., 2003

47 Representative Multidisciplinary Conflict Management Program Team

• Human Resources • Business/Management • Legal • Training/OD • Communications/PR • Technology • Program Administrator • Project Managers

and resources necessary to support the system to ensure usability. ensure to system the support to necessary resources and

emphasizes the importance of providing the motivation, skills, skills, motivation, the providing of importance the emphasizes Designer System 4.

necessary. are modifications systems

a dispute has been resolved to determine if if determine to resolved been has dispute a after results the assess to system the

System Designer Designer System 3. in in process evaluation an including of importance the stresses

issue. their resolve to fails processes

the system to be able to loop back to a lower level process if one of the higher higher the of one if process level lower a to back loop to able be to system the

encourages the team to allow employees or consumers using using consumers or employees allow to team the encourages Designer System 2.

based processes as back ups. back as processes based - rights includes also

a system that attempts to resolve issues with interest based processes first, but but first, processes based interest with issues resolve to attempts that system a

based processes, such as arbitration and litigation. We encourage them to design design to them encourage We litigation. and arbitration as such processes, based

interest based processes, such as negotiation and mediation, compared to rights rights to compared mediation, and negotiation as such processes, based interest

works with the team to understand the difference between between difference the understand to team the with works Designer System 1.

ased ased B - Interest esign D

Needs Assessment and Analysis

• Organization’s mission • Organization’s “culture of conflict” • Organization’s “customers” • Current state of the organization’s disputes – Assessing the nature of those disputes – Assessing the number of those disputes – Assessing the effect the disputes have on the organization – Assessing current dispute resolution processes – Assessing the results of those resolution processes • Gather results and present to as many system participants and stakeholders as possible for confirmation, clarification, and revision • Solicit feedback

Needs Analysis / Program Decisions

• Review Existing Employment Dispute Resolution Processes, Documentation, and other Information • Interview Key Human Resources, Legal and Other Management Personnel • Determine Baseline Data for Employment Disputes • Conduct Employee Focus Group Meetings • Develop Report of Goals and Findings • Provide Recommendation for Program • Develop Essential Program Contents Outline

- Conflict of Sources Biggest

System Current of Weaknesses and Strengths -

Estimated Current Annual Cost of Conflict Conflict of Cost Annual Current Estimated -

shows: report The

Needs Analysis Report Report Analysis Needs

comprehensive system comprehensive

Options may be be may Options 4. if client not willing to commit to a a to commit to willing not client if carte la a ” “

organization. the from stakeholders

that any system should be designed with a broad team of key key of team broad a with designed be should system any that

preliminary A 3. recommendation is outlined with a very clear message message clear very a with outlined is recommendation “ ”

system a implementing of benefits

process. This is done by objective data linking business interests with the the with interests business linking data objective by done is This process.

to grant authority to assemble a design team and move forward with the the with forward move and team design a assemble to authority grant to

The purpose of the Needs Analysis Report is to persuade the organization organization the persuade to is Report Analysis Needs the of purpose The 2.

confirmation, clarification, and revision. and clarification, confirmation,

The Needs Analysis Report is presented to key stakeholders for for stakeholders key to presented is Report Analysis Needs The 1.

Preliminary Recommendation Recommendation Preliminary

Outline Contents Program Essential 3.

Recommendations for the Program the for Recommendations

Findings and Goals 1.

in developing a final report which shall include: shall which report final a developing in

Once all the design decisions have been made, made, been have decisions design the all Once assists the team team the assists CoralBridge

s Report Report s Team Design

’

Sample List of Issues for Consideration (Employment Dispute Resolution Program)

• Types of ADR Mechanisms • Structure of ADR Mechanisms • Internal vs. External Processes • Optional vs. Required Processes • Non-binding vs. Binding Processes • Create/Integrate w/Employee Legal Services Plan • Classification of Employees Covered • Nature of Disputes Covered/Excluded

55 Sample List of Issues for Consideration (cont.) (Employment Dispute Resolution Program)

• Program Staffing • Create/Integrate Employee Hotline • Pilot Program vs. Enterprise-wide Roll-out • Communication Methodology • Training and Education Methodology • Tracking and Evaluation Methodology • Integrate ADR Suitability Screen • Integrate ADR Neutral Database

Training and Education

Communication

Documentation

Out Roll

ADR Process Evaluation Form Evaluation Process ADR

•

Mediation/Arbitration Agreements Mediation/Arbitration

•

Form Submission Dispute •

Brochure Program •

Program Guidelines (or Rules) (for all ADR mechanisms) ADR all (for Rules) (or Guidelines Program

•

Documentation

privileges in relation to the system the to relation in privileges

use and their roles, responsibilities, and and responsibilities, roles, their and use

regarding the existence of the system and its its and system the of existence the regarding

Purpose: to educate all parties and users users and parties all educate to Purpose:

Program Communication Program

desired) (if Efforts Relations Public • 60

Employee Hotline/1 Employee Number 800 - •

Program Posters, Wallet Cards, etc. Cards, Wallet Posters, Program

•

Brochures •

Media/Intranet Social •

mail to Employees to mail - E

•

management - Non •

Management

•

Program Orientation Program

•

level Educational Presentation Educational level - High

•

(EMPLOYMENT DISPUTE RESOLUTION PROGRAM) RESOLUTION DISPUTE (EMPLOYMENT

SAMPLE PROGRAM COMMUNICATION PROGRAM SAMPLE

Employment Dispute Resolution Program Communication - External

• EEOC • Neutral providers • Media • Annual reports • Company website • Presentations (ICLE, Human Resources meetings, etc.) • Other ideas • Project planning (sequence of activities, deadlines, responsibilities assigned) • Budget! Pathways – Common Ground

• We acknowledge employment issues are difficult • Employees are not alone • Employees have multiple avenues for resolving issues • The Company provides ways to manage disputes better and quicker • The Company strives for fair, quick, amicable resolution

Employees will be treated with DIGNITY & RESPECT

62 Program Training Purpose: Building • Skill building for managers and others to competencies to use fulfill early intervention requirements dispute resolution • Advanced training for key groups such as processes, improve attorneys, human resource managers, peer review panelists, ombudsmen, and others communication skills, and learn negotiation and • Link skills training to professional development programs mediation principles • Offer training in a variety of formats on an ongoing basis

63 Program Evaluation To assess whether the • Collect and analyze baseline data program is operating as • Collect data at all points in the system intended; to measure • Elicit feedback from parties using the system success in achieving goals; • Survey parties to determine knowledge of to determine the necessity and satisfaction with system options for modifications • Evaluate both process variables and outcome variables • Conduct evaluation at least annually • Review systems based on lessons learned

Merchant & Costantino

goals Reclarify 8.

result Measure 7.

Modify system Modify 6.

progress Chart 5.

system Implement 4.

Establish baseline Establish 3.

Determine methodology Determine 2.

goals Clarify 1.

Eight Step Evaluation Cycle Evaluation Step Eight

Employee Dispute Resolution Program (Litigation Prevention System) Benefits Factor Litigation Route Litigation Prevention Approach Focus Past Future Time/Costs Long/EEOC Charges, Lawsuits/settlements Short, quick—saves time, money, anguish

Process Adversarial/controlled buy judge Collaborative/disputes resolved quickly

Provides more options for employees No Yes…enhances current dispute resolution

Flexibility to handle disputes that fall No/Public Yes/Private and Confidential outside of rule or legal jurisdiction

Addressing the underlying emotional No Yes-One of the major objectives is to assure individual integrity is reasons for the dispute valued/maintained

Values played out Rule Driven Values Value-Driven Rules-promotes open door policy

Information Availability Not exchanged early and cannot be used to Exchanged…prevention and good will is central to this approach prevent problems

Mental set (primary ) Formal, logical and un-poetic Informal, Intuitive …artistic

Who wins Routinely produces more losers Routinely produces more satisfied winners

Results are based upon Fault Finding/ Resolving Underlying Issues

Results Unworkable results are difficult to correct One of the major objectives …a process with ‘workable’ outcomes 66 Core Principles of Systems Design

• Reframe conflict from a destructive to a constructive force for change • Focus on conflict prevention and de-escalation • Intervene at the earliest possible time, at the lowest possible level, using the least possible amount of organizational resources. • Diagnose before prescribing • Utilize a facilitative model and consider organizational dynamics (culture, resistance to change, incentive and reward structures) Provide “loop-backs” • Build in consultation before and feedback after • Provide the motivation, skills, and resources necessary (ensure that the procedures are supported and therefore used)