Time to talk: the benefits of handling pay-related disputes through mediation – Pay and Benefits Magazine

Ever since the salary was invented, there have been pay-related tensions between employer and employee – and also between workers who are disgruntled at their relative payment levels. In times of economic hardship, these tensions intensify as the pot of money available for compensation shrinks. Without a doubt, 2012 is such a time.

A grim outlook

When hoped-for salary rises fail to materialise and personal dreams are dashed, the temptation is to look for someone or something to blame. Sometimes it is the company that is held responsible; in other instances it is a representative of the organisation; and it may be that a colleague appears to have received a raise that an individual thought should have been theirs. In many cases, the matter will eventually be referred to some form of arbitration, in which a third party looks at both perspectives and makes a decision as to the outcome. Hearings like this carry hefty costs in terms of time, money and stress, and everyone comes out of it with a bad taste in their mouth – even the “winner”. It’s guaranteed that at least one party will emerge feeling even more disgruntled than before – the “loser”, as it were.

In these times of budget-shrinking and pay freezes, is there anything that industry professionals can do to avoid this all too familiar nightmare?

The conflict iceberg

Pay-related disputes are never going to disappear entirely. However, by handling them differently, there may be hope of a brighter future. There may even be a way to find opportunity amid the nightmare. To see this, it’s a good idea to first analyse the nature of the conflict.

A dispute is like an iceberg. What we generally see is just the tip – the conflicting positions which the parties tend to broadcast to the world: “I want a pay rise” versus “You can’t have a pay rise.” Yet, beneath these surface positions lie a host of other factors that the parties may not be so ready to publicise. This is the heart of the conflict: the underlying interests, needs and feelings of the parties, which explain why they hold the positions that they do and how they feel about the situation. For example, an employee may have been hoping for a pay rise in order to prove to her family how much her company values her (rather than for the money itself). This is one of her interests. Driving these interests are a number of basic human needs. Perhaps the individual’s need is “to be acknowledged” or “to be valued”. Then there are the feelings associated with the conflict. The other party, the employer, may have some strong feelings of guilt or sadness for the employee which generate stress and consume large amounts of emotional energy.

Arbitration addresses only the surfacelevel positions. As a structured, formal process that is witnessed by many and recorded in full, it tends to crystallise the dispute around these positions. The result is that the parties begin to identify themselves with those stances and find it almost impossible to back down or search for alternatives. The strength of arbitration is that it guarantees a clear outcome – a decision as to which party’s view will be upheld. However, it leaves a whole lot of unfinished business festering beneath the surface. It is this unfinished business that leaves the bitter taste in the mouths of all involved.

There is another approach, which is designed specifically to go beneath the tip of the conflict iceberg, to address the underlying issues.

Candid discussions

Mediation is a voluntary, confidential, self determining process of conflict management facilitated by an impartial mediator. In simple terms, it’s an opportunity for the disputing parties to talk candidly, confidentially and freely about what has happened and to decide what they wish to do about it. The mediator will use a range of communication techniques to help the parties express themselves and hear one another, but will strictly not offer opinions or make suggestions.

This approach has already been tested in countless workplace disputes in the UK: between colleagues, between employee and manager, and across teams. It can be used for issues ranging from relationship breakdown to substantive issues such as payrelated disputes. In any conflict, beneath the surface there lies a mass of interests, needs and feelings. If explored, these can minimise the financial and human costs, yield more effective, lasting outcomes and even produce some surprising benefits at the personal and organisational level.

Nightmare to opportunity

So how can mediation produce such results out of the nightmare that is conflict?

This can initially be seen by considering the content of mediation: what the parties talk about. We have seen that arbitration typically addresses only the surface level of the conflict, the parties’ stated positions. Mediation, being a confidential, informal process, is an opportunity for the parties to communicate about the heart of the problem,the interests, needs and feelings associated with the conflict. This has two vital benefits.

First, it enables the parties to understand one another better. In conflict situations each party tends to demonise the other. They forget good things they know about them and focus only on the negative. Communicating about underlying interests, needs and feelings rehumanises the other party. By talking about needs, parties are able to find something that they can relate to. Every human being in anysituation has a need to be acknowledged. So communication at this level can help parties to make sense of one another’s behaviour, accept what has happened and even perhaps build a bridge to the other one.

In other words, by allowing the parties to communicate at a more personal level, mediation can reduce the anguish caused byconflict, enabling the parties to move on sooner.

Second, the exchange of interests and nedds can give rise to new, more creative solutions to the dispute. Using the earlier example, having heard theemployee’s desire to prove her worth to her family, the employer may be able to find some other way to meet that need without giving the pay rise. Perhaps it can offer a promotion to a more senior position with a commitment to an increase as soon as the budget allows. In other words, by exchanging information about interests and needs, mediation can be more effective than arbitration at finding solutions. It provides an opportunity for more creative problem-solving.

Another way to understand the power of mediation is to consider the process and principles of mediation. In other words, the way the conversation is held.

The hallmark of mediation is that the parties themselves are in control of the conversation and the outcome. They only attend mediation if they so wish. They choose what to talk about, and how, and they decide jointly what they wish to do going forward.

This means that the parties are more likely to see themselves as self-determining agents capable of making decisions and choosing their own future. Both parties can come out of mediation with their dignity intact. It also means that any agreement is far morelikely to stick, since the people required to put the agreement into practice (the parties themselves) are the people who design it in the first place.

The process of mediation also allows for quantifiable benefits in terms of time and cost savings. Mediation usually requires one mediator for a single day. There are no witnesses, no note-takers, no legal fees and no court costs. Moreover, the process requires far less administrative support relative to formal processes and employment tribunals.

The benefits do not stop there. Mediation gives rise to new opportunities for growthand learning at a personal and organisational level. By exchanging information about their interests, feelings and needs, the parties have a chance to gain awareness of themselves and one another. They are able to gain tools for handling conflict when it arises again in future. By putting these new skills and insights into practice in the workplace, they can increase the ability of the organisation to handle conflict constructively. Moreover, the vehicle of mediation can be used by the organisation to demonstrate a commitment to employee well being and trust in the individual. Over time, as more employees have experience of mediation or hear about it through word of mouth, it can contribute to a cultural shift – away from a hierarchical culture of command and control, towards one of empowerment, transparency and learning.

Minimising suffering

The current economic woes may be an opportunity in disguise. Given the prospect of escalating pay-related disputes, more organisations may choose to rethink their response to conflict. By introducing mediation, there is a chance to minimise human suffering and financial cost and create new opportunities for personal and organisational growth. It may seem ironic that such benefits can emerge out of the nightmare that is pay-related conflict but, as Einstein so succinctly put it: “In the middle of difficulty lies opportunity.”

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