In Harmony’s Way

Conflict between co-workers needs to be handled delicately and resolved before it brings a business to its knees.

By Fiona Smith

 

Who would think a “good deed for the day” of washing and putting away a colleague’s coffee mug could bring an office to a standstill? But it did. People took sides, stopped talking to each other, work suffered, an official complaint was made and a mediator was brought in to settle the matter.

Crazy stuff can happen in workplaces because people don’t always act rationally and misunderstandings can occur when communication is poor.

“What is normal workplace behaviour? There is no such thing as normal, outside what is legally required,” says Joydeep Hor, managing principal of law firm People + Culture Strategies.

In the case of the coffee mug, the woman who brought the complaint thought the “good deed” was an attempt to annoy her. Her colleague thought she was doing the other woman a favour that might help them get along better.

Of course, there was some history behind the conflict. The complainant tended to keep to herself and was not particularly interested in being social. The other woman, who was outgoing, read her colleague’s reticence as rudeness and hostility and responded in kind.

They had both made complaints over two years to their manager about each other’s attitude, but – and here is the key point to this story – the manager decided this was too petty to act upon. Instead, the manager told each woman that the other would be spoken to, but it never happened. The manager just hoped it would blow over.

The mediator, Catherine Gillespie, says each worker was under the impression the other was ignoring an instruction to change her behaviour.

“The managers couldn’t believe they were complaining over [the coffee mug], but it was because management had ignored all the complaints over two years and hadn’t resolved the actual underlying issues,” says Gillespie, managing director of Workplace Harmony & Conflict Resolution.

Gillespie took all the parties for one-on-one meetings to find out what happened and then asked them to look at it from different perspectives. She then inquired what solutions they wanted and how they were going to work together going forward.

Once the role of the manager’s inaction was clearly understood, the women could shift some of the blame onto their boss, opening the way for better communication with each other.

“They both had the same intention: they wanted a good workplace,” says Gillespie.

In most mediations, Gillespie says she discovers a third person who could have resolved things. “But, because they didn’t, the situation has escalated”.

People don’t speak up because they fear the reaction when they ask someone why they don’t greet them when they pass in the hallway or why they seem to delay responding to their emails.

Speaking of emails, these missives are fuel to the bonfire of bad workplace relationships because the tone of written communications can be easily misconstrued.

“It is because they are overlaying all of their past history and assumptions onto that email that they read it in different ways,” Gillespie says.

“Then, when they don’t talk to each other, they start talking to their colleagues about how horrible the other person is.” Communication between the two people becomes difficult, team meetings are awkward and cliques and divisions form in the workplace.

“The productivity of the whole team is now affected because people feel like they have to take sides,” Gillespie continues.

Gillespie says most situations can be resolved: “They actually do want to have a voice and be able to resolve things. They don’t like being in that uncomfortable state.

“We need to have those difficult conversations – and people want to have them.”

Surveys of executives have shown 85 per cent of them had issues they were afraid to raise at work, according to Margaret Heffernan, a former CEO and author of Wilful Blindness: Why We Ignore the Obvious at our Peril.

“[They are] afraid of the conflict that would provoke, afraid to get embroiled in arguments they did not know how to manage and felt they were bound to lose,” she told an audience at a TED Talk in 2012.

This means that leaders, who go out of their way to recruit the best people, fail to get the best out of those people, she said.

Margaret Heffernan delivers her ‘Dare to Disagree’ talk at TEDglobal in 2012.

Joydeep Hor says his firm is increasingly asked to audit the culture of client organisations and mediate when there is conflict. There is often a systemic problem that can be identified behind the conflict and, unless it is analysed, then trouble is likely to reoccur.

“You will be back in the same spot, maybe not with the same people, but very quickly,” he says.

Hor says disputes usually involve people who are reasonably well-regarded by their employer: “But, for whatever reason, some level of conflict has developed in the relationship – whether it’s a personality conflict, ways of working conflict, or a disagreement about operational matters.” This has a flow-on effect to other people.

“The organisation doesn’t see it necessarily as a legal matter, but they see it as a very core productivity and cultural matter,” Hor says.

If organisations want to protect themselves from conflict, they should start by having clear expectations about the kind of communication, respect and behaviour that is accepted, he says.

A sure sign of conflict is a rise in stress leave and complaints, says dispute resolution specialist Shirli Kirschner.

“We are primed to fight, flight or freeze when we feel unsafe and that is why conflict is so unhealthy for humans because, the minute we feel unsafe, we are running huge amounts of adrenaline and negative headspace,” says Kirschner, who is the principal of Resolve Advisors.

Kirschner says a common scenario is when a new person comes into a workplace and tries to change bad behaviour that has previously been tolerated.

That misbehaving person may have been protected because they were regarded as a high performer in other ways, because they had a close relationship with a client or were a favourite of the CEO.

“The new person coming in is operating by a new set of rules and that creates huge problems. The person exhibiting the behaviour may have been doing it for 10 or 20 years and they are completely befuddled about why it is suddenly not OK,” she says.

Conflict also arises when a valuable employee has a “messianic complex” and believes they are the only one who can keep the system running.

If an area becomes understaffed, these people will quietly take on all the extra work and not complain.

“And then, at a point, they snap. They then often feel angry and undervalued. Because of their own huge competence and silence, they are not under-appreciated, but no-one has any visibility about what they have done,” Kirschner says.

“The day they start feeling undervalued, the world starts falling apart on both sides. The organisation can’t understand what is going on and the person can’t understand how they can possibly be under-valued when they have given their heart and soul and hundreds of hours.”

Other common flashpoints are promotion from within, difficult personalities, poor communication or co-ordination (perhaps leaving people out of an information loop), or issues to do with the business that put people under intense pressure, such as downsizing or relocation.

Kirschner says dealing with conflict should start with an assessment. Going straight into an investigation can sometimes make things worse by unearthing bad behaviour on both sides.

She suggests taking each person for a confidential coffee meeting, where they can be asked what result they would like to see out of the situation.

Then a recommendation should be made for mediation, perhaps with an expert mediator, an investigation, complex coaching, or something else.

With any luck, that “something else” may involve something simple like an acknowledgement of the complaint, an agreement that things will change and a determination to “move on”.

Three Points of View

 

Should investors have a say on what CEOs are paid?

The premise: Those companies which adopt a ‘say on pay approach’ are better led, perform well and have lower costs, so says research from business school INSEAD.

 

Maria Guadalupe
Associate Professor Economics and Political Science, INSEAD

We found that a say on pay does indeed pay off across multiple dimensions (in a paper published in the Review of Finance, ‘Say Pays! Shareholder Voice and Firm Performance’).

Our analysis, which covers 250 cases of proposals to adopt the say-on-pay policy between 2006 and 2010 – before shareholder votes on pay were mandatory in the US – shows that if the policy was adopted, say on pay increased shareholder value by about five per cent. We also show evidence that say on pay has a positive impact on firms’ accounting and operational performance in the years following the vote.

By giving shareholders a channel to express their opinions, it intensifies board monitoring and pressure on the CEO to improve performance. It can also affect the current level and structure of executive pay, making it more closely tied with performance.

 

 

Graeme Bottrill
National president Australian Investors Association

Shareholders have a wide range of investing, corporate and management skills, but I expect that the typical investor most likely has a minimum of these skills.

Since these ‘average’ shareholders have little ability to determine an appropriate remuneration package for a CEO, it’s difficult to imagine a mechanism where shareholders could have a credible input into such matters.

Having said that, it is certainly appropriate to call out the extremes. This is not some formal arrangement for ‘having a say’, but the investing community can certainly recognise an excess when presented with one, and may be active and vocal at annual meetings and the like.

My view therefore is that shareholders should not be given any formal arrangement to control CEO remuneration, but they may have a voice through the annual meeting process.

 

 

Martin Lawrence
Research director Ownership Matters

I think they should have an influence but not the final say. In a large listed company, you have to strike a balance between allowing shareholders to have their views heard and them actually having a final say.

The areas where I think shareholders should have an absolute say is around the allocation of their equity to executives. As a shareholder, you have a fundamental right to a share in the company. We used to have quite good rules in Australia for dealing with insiders’ capacity to get their hands on shares without paying the market price.

Those rules have basically been gutted over the last 10 to 15 years. Now you see the curious thing of large listed companies spending tens of millions of dollars of their shareholders’ money to buy shares for their executives without shareholders having any binding say on it at all.

 

 

Encouraging diversity in your workplace

Many organisations now recognise that a diverse workplace is not only something to aim for on equity grounds, it is also strength that enriches and expands the skill sets and understanding of an organisation. A workplace that values diversity can increase employee job satisfaction, in turn reducing staff turnover, as well as harness perspectives and insights it might not otherwise consider – a crucial step to understanding different customers and markets. At a time when Australia is facing a skills shortage and an ageing population, workplace diversity is more important than ever.

However, actually ensuring people of diverse backgrounds are hired in your organisation and are then made to feel welcome is something that many workplaces struggle with. Here are five steps you can take to encourage workplace diversity.

 

  1. Ensure your HR team recognises the importance of diversity

    There is no point espousing the importance of a diverse workplace if the people responsible for hiring are not on board. An HR team needs to do more than pay lip service to the value of diversity – it needs to truly appreciate that a homogenous workplace is one that is missing out on crucial perspectives and skills. Ensure your HR team has done rigorous diversity training, and, critically, ensure your HR team itself is diverse.

  2. Invest in diversity training

    There will be limitations to what an organisation can learn through in-house measures. Organise for an external body to run diversity training for your workplace and ensure that all employees attend – even (maybe, especially) senior staff. Get feedback on what the workplace thought of the training – have debriefs with staff members who may have specific concerns or questions. These will not be trainings that you can organise as a one-off occasion. They will need to be ongoing, firstly to cater to new employees and secondly because diversity is not a static or fixed issue – it is constantly changing and being re-assessed as Australia’s wider diversity changes. What’s more, if the aim of the training is to educate the workplace, a commitment to reinforcing the lessons is important.

  1. Implement diversity-friendly policies

    Providing alternative working arrangements, such as a compressed work week, job-sharing, part-time roles and modified start and end times to the working day will make your workplace more accessible to those with children and caring responsibilities. Accommodating cultural and religious holidays will make your workplace more welcoming to employees from culturally and linguistically diverse backgrounds, as will permitting diversity-friendly clothing choices in the office. Lastly, but most importantly, make sure that your wages are fair and equal – not only within your organisation but across the workforce more broadly.

  1. Mentoring

    While facilitating diversity in junior and middle management positions is often very achievable, ensuring that diversity reaches the senior levels of an organisation will often involve further steps. Mentoring is one way to encourage diversity in executive positions. Match underrepresented employees with senior members of staff and encourage membership with relevant external professional organisations to support diversity in your workplace.

  1. Recognise your own limitations

    Any individual will have a limited experience of the world and will subsequently have limited perspectives on a given issue. Acknowledge that there may not always be an objective way of seeing something and if someone else in your office has a different perspective, stop talking and listen. Everyone has unconscious biases. Don’t be defensive if you are called out on them – acknowledge it is okay to be wrong and treat it as a learning experience.

How to resolve a workplace bullying claim

Claims of workplace bullying are a disturbingly familiar story. An employee has a performance problem and their manager decides to do something to fix it. The manager gives the employee some critical feedback, which the recipient feels is unwarranted. The employee makes a careless mistake and the manager berates them in the lunch room. Finally, the manager decides to put the employee on a performance improvement plan, only for the employee to take an extended absence on sick leave, and bring a bullying complaint against the manager.

Resolving a bullying complaint inevitably involves strong emotions on both sides. The employee making a complaint may genuinely feel they have been unfairly targeted, while the person complained against commonly reacts with shock and disbelief.

In 2014, for the first time, Australian workers were given a legal avenue to address workplace bullying while it was going on. Before that, they could claim compensation for mental stress caused by bullying, but only after the damage was done.

Changes made to the Fair Work Act mean workers can apply for a “stop bullying order” against an organisation, an individual, or a group of individuals. If an application is successful, the Fair Work Commission can make any order it considers appropriate to protect a worker from the risk of further bullying, short of requiring payment of money or imposing a financial penalty. These amendments provided, for the first time, a legal definition of bullying as “repeated unreasonable behaviour”. Importantly, the definition specifically excludes “reasonable management action carried out in a reasonable manner”.

Despite initial fears the changes would spark an avalanche of applications for “stop bullying orders”, in the 2015-2016 financial year the Fair Work Commission received just 734 applications. Less than 8 per cent of these proceeded to a decision being issued by the Commission, and a “stop bullying order” was issued by the Commission in only seven cases.

The Commission appears to take a pragmatic approach in determining if bullying has occurred. In the recent case of Edwards v E&S Trading Co, Rebecka Edwards, a sales consultant at the E&S kitchen and bathroom store in Moorabbin, claimed she’d been bullied due to incidents that included:

  • a colleague accusing her of spilling coffee beans in the kitchen and yelling at her to clean it up
  • other employees arguing in the company’s reception area in front of customers
  • rumours among other staff that Edwards had “egged” a colleague’s car
  • allegations that a colleague was “stealing” Edwards’ sales
  • management ignoring her complaints, thereby perpetuating these behaviours.

As is often seen in bullying matters, the complainant was also subject to performance management, and had received a final warning for her own conduct.

The Commission accepted that Edwards was anxious and distressed and genuinely believed she’d been bullied. They also noted that the E&S managers could have handled the performance management process in a better way.

But in light of how the evidence from other witnesses sharply contrasted with Edwards’ own, the Commission decided it could not objectively conclude Edwards’ colleagues had “repeatedly behaved unreasonably” and bullied her. The performance management process, although not perfect, was deemed “reasonable management action”.

In another 2016 case, Western Australian truck driver Bevan Gillies claimed he was the victim of a sustained campaign of bullying and intimidation by his depot manager at HPS Transport, including:

  •  giving the driver a warning letter after he refused to complete an afternoon run
  • singling out the driver for failing to complete and sign the employer’s uniform policy
  • giving the driver a warning when he turned up four hours late to work [his start time was 3am], and subsequently standing him down with no pay.

However, the Commission considered that all these incidents were consequences that flowed on from Gillies’ own actions, and that the manager had taken reasonable actions in a reasonable manner. Importantly, it concluded that as the depot manager no longer had any direct dealing with Gillies, there was no risk of him being further bullied, so the “stop bullying order” application was dismissed.

4 TIPS TO MINIMISE THE DAMAGE CAUSED BY WORKPLACE BULLYING CLAIMS

  1. Be prepared, but not panicked, about bullying complaints
  2. Have a policy that outlines expectations of employee behaviour in the workplace
  3. Investigate any bullying allegations that are raised, and take action if necessary
  4. Be especially careful to follow due process when dealing with performance management.

Elizabeth Ticehurst is Special Counsel – Employment at KPMG.