What Is Dispute Resolution in the Workplace? (With Benefits)

By Indeed Editorial Team

Published 30 April 2022

Resolving disputes in the workplace can help employees and managers settle disagreements collectively. Some people prefer to negotiate solutions among themselves, whereas others request more objective mediators to help resolve the situation. Learning about the process of dispute resolution and how you can effectively solve disagreements might benefit your professional relationships at work. In this article, we define dispute resolution in the workplace, provide the benefits of resolving disputes among colleagues, explain how to manage and resolve common work disputes and list skills you can use when resolving disagreements.

Related: Workplace Mediation: How to Resolve Conflicts at Work

What is dispute resolution?

Dispute resolution is the process of resolving conflicts between employees, managers, supervisors and other team members. Participating in dispute resolution can foster personal growth in individuals and provide opportunities to strengthen professional relationships at work. An organisation may have a written dispute resolution process, or one may exist in the applicable industrial award or enterprise agreement.

Both parties in the disagreement might negotiate solutions or initiate a mediated outcome that involves bringing someone else into the conversation. For example, the company might contact the Fair Work Commission to gain advice on how they can form an agreement. If both parties can't agree on a solution, they might take the disagreement to a mediator, or ultimately to court where a judge will make a binding decision.

Related: Work Rights in Australia: A Comprehensive Guide

Top 5 benefits of resolving workplace disputes

People who are open to resolving disputes usually feel more comfortable in a workplace. Companies may look for candidates with proven problem-solving and interpersonal skills, as it shows they can work with others to develop solutions. Here are the top five benefits of resolving disputes in the workplace:

Stronger workplace relationships

Employees who value open communication may spend time listening to their peers' concerns by arranging meetings to determine the core problem. Showing commitment to hearing colleagues out can help them feel valued. Stronger relationships usually lead to higher job satisfaction, as people may feel comfortable working with others in team activities. Overcoming workplace disputes can build a strong support system in the organisation and inspire people to establish mutual respect.

Reduced legal costs

Organisations often prefer team members to resolve disputes in the workplace, as this can prevent legal costs in court proceedings. Teams that resolve disagreements internally can save on external expenses and come to a collective solution more naturally.

Increased productivity and satisfaction

Employees and managers who settle disputes quickly may feel encouraged to improve their productivity and help others find job satisfaction. For example, if two colleagues resolve their disagreement on how to start a project, they might feel more comfortable working together on future tasks. This can improve work performance of employees and motivate others. Increased job satisfaction is a good way for team members to feel engaged in the business and want to continue working there.

Healthier work environment

Preventing conflicts in the workplace may promote a healthy work environment where people are honest about their thoughts and feelings. Resolving disputes can generate positivity in the workplace, as people can learn the process of overcoming disagreements. Both parties in the dispute might arrange personal meetings to discuss the problem in-depth and find solutions that can encourage them to work together effectively.

Enhanced communication

Resolving disputes requires strong communication skills, which may help individuals to develop these skills as a result of discussions. For example, if both parties are in a private meeting, they might take turns expressing their side of the situation and how they may prefer to resolve it. Continuous feedback can help the parties to understand one another's thought processes when resolving conflict. Strong communication may contribute to team-building and creating trust among employees and managers in the company.

Related: Understanding and Overcoming Common Communication Barriers With Examples

How to manage and resolve disputes at work

The most suitable dispute resolution process depends on the nature of the conflict and the team members involved. For example, legal issues regarding pay might escalate to court proceedings. Here's a guide you can follow to help you resolve disputes:

1. Establish the reason for the conflict

Recognising the reason behind disagreements may help you notice signs of conflict before they become serious. Managers might notice a department that's not meeting deadlines or employees might realise that other team members aren't showing up for work. Once you notice these signs, you can arrange meetings with the other party or call third-party mediators to discuss your thoughts and find out the underlying cause. Understanding the reason first can help you create a process that allows both parties to negotiate and find a suitable resolution.

2. Encourage team members to communicate

Communication after disagreements can be important for both parties to express their feelings about the situation. You can encourage verbal honesty by becoming an unbiased mediator to the situation and asking questions about how each individual feels. If you're a manager, you can question both parties about their perspectives and discuss negotiation strategies that may work for both of them. Those who can resolve problems can speak about their true feelings and build rapport with team members.

Related: 11 Advantages of Working as a Team (An Overview of Teamwork)

3. Design a suitable process

Depending on the type of conflict, you can design a dispute resolution process that may encourage team members to resolve the disagreement. For example, if the dispute is about project roles, you can plan meetings that allow both parties to negotiate their tasks on the team. These processes might help you resolve conflicts in the future and provide steps on how to approach conflicted team members. If you're unsure of how to settle the disagreement, you can ask the Fair Work Ombudsman for advice.

4. Implement dispute resolutions

Once you have a suitable process, you can use that to settle the disagreement and help team members negotiate terms. If you can't resolve the dispute with the other party, you might contact a mediator who can provide advice and form agreements that people might accept. It's important to communicate procedures with people to make sure they're comfortable with the resolution. You can implement the process during the early stages of a conflict, as this may prevent further disagreements at work.

5. Train the team how to prevent disputes

If you're a manager, you might create training sessions that help employees stay aware of conflict signs and how they can diffuse the situation without management intervention. The training can involve verbal communication strategies, active listening techniques and respectful language which can encourage employees to remain honest. Some people also react differently to conflicts depending on their background, work experience and communication style. It may be worth addressing all team members in the training and showing them the types of processes for dispute resolution.

Skills for resolving disputes

Many people use a range of skills when resolving disputes in the workplace. This can help them settle the disagreement faster and find a reasonable solution. The following skills could be valuable when resolving disputes:

Negotiation

Those who have negotiation skills can consider all sides of the disagreement and offer different solutions. Their ability to negotiate with people and think of solutions may also show the management team that they're willing to prevent conflicts. Good negotiators may also act as mediators, as they can find commonality between parties and build a solution based on their similarities. Equally, they can encourage individuals to accept compromises.

Problem-solving

Solving problems efficiently can prevent disputes from progressing to senior management, external mediators or legal action. Employees who understand the situation can think about the problem and ideas for a resolution. Solving problems may also help employees and managers prevent the same disagreements from happening again. Strong conflict resolution skills may contribute to successful career development and learning efficient problem-solving skills.

Related: 10 Problem-Solving Interview Questions (With Example Answers)

Communication

Strong communication skills mean people can listen to and understand the other person's feelings and take their feelings into consideration. During a discussion, clear verbal communication and open body language help to explain points of view. Active listening is equally important as it allows employees to identify others' concerns and tailoring a solution around this information. Good writing skills can also help employees use clear and polite language when communicating in writing, especially in more informal media such as emails.

Please note that none of the companies mentioned in this article are affiliated with Indeed.