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The Hidden Impact of Unresolved Grievance Issues on Workplace Culture – Antony Sendall

23.09.24

Grievance procedures are deeply embedded in workplace culture as the default method for employees to raise concerns or complaints about workplace issues. An employer’s conflict resolution toolkit needs to include mechanisms for resolving such issues, but evidence consistently shows that traditional grievance processes fail to address the underlying problems that give rise to grievances, leading to a host of negative outcomes for both employees and employers.

It is not enough to dismiss the grievance and hope that the employee will consider the underlying issue to have been resolved. Far from resolving the underlying issue, the dismissal of a grievance may make it worse.

This article draws on the findings from the CIPD 2024 Report  “How employers are tackling bullying and harassment at work”, which highlights the stark disconnect between employer confidence in conflict resolution procedures and the lived experiences of their employees. It underscores the urgent need for more effective early resolution processes, particularly workplace mediation or facilitated conversations. Employment lawyers have a key role in assisting clients to reform their grievance procedures to prevent the detrimental impact unresolved conflicts can have on productivity, morale, and retention. The Worker Protection (Amendment of Equality Act 2010) Act 2023 which comes into effect in October 2024, presents an excellent opportunity for employers to review and improve their processes, especially in the light of the requirement to take proactive steps to prevent sexual harassment in the workplace.

The consequences of dismissing grievances without resolving underlying conflict

The dismissal of grievances, without attempting to resolve the underlying issues that led to the grievance being raised is not only an ineffective process, it is also likely to be harmful to the employment relationship. When employees feel that their complaints are dismissed without being resolved, several adverse consequences may arise:

• Lower Morale: Employees who perceive that their grievances are ignored or dismissed are likely to feel undervalued. The CIPD 2024 Report shows that unresolved conflict leads to a breakdown in trust between staff and management, contributing to lower morale across teams. Employees may believe that the organisation does not care about their concerns, which can lead to disengagement.
• Decreased Productivity: Disengaged employees are far less productive. Studies on workplace conflict consistently reveal that unresolved issues consume valuable working time, as employees are distracted by stress and internal politics. In extreme cases, they may even resort to absenteeism or presenteeism, where they attend work but are not fully productive.
• Lower Employee Engagement: Employee engagement is key to a high-performing workforce. However, the CIPD 2024 Report found that many employees choose to “let go” of their grievances, and end up feeling feeling that it is futile to raise issues. This disengagement fosters a culture of silence, where employees no longer feel motivated to contribute fully or innovate.
• High Employee Turnover: The frustration of unresolved grievances often pushes employees to seek alternative employment. The CIPD 2024 Report’s findings suggest that around 9% of employees who experience conflict actively seek a new job, a figure that represents a significant turnover cost for employers. Replacing an employee is costly, with recruitment, training, and onboarding expenses being high. Research indicates that nearly half a million workers in the UK resign each year due to workplace disputes. Hiring, onboarding, and training replacements are time-consuming and expensive processes that could be avoided with effective conflict resolution mechanisms.

The Role of Effective Early Resolution Processes

Given the significant negative impacts of unresolved grievances, early resolution processes—such as workplace mediation—are crucial. Mediation offers several benefits over traditional grievance procedures:

• Addressing Root Causes: Mediation focuses on open dialogue and understanding the underlying causes of conflict. It moves beyond the surface-level complaints and helps both parties to explore their interests and concerns, paving the way for more effective and sustainable solutions.
• Preventing Escalation: One key advantage of mediation is that it prevents disputes from escalating. By intervening early, mediators can resolve tensions before they spiral into formal grievances or employment tribunal claims, which are costly and time-consuming. The first step in most grievance procedures involves appointing someone to investigate the grievance which commonly creates an adversarial atmosphere and involves forming a view on who is right and who is wrong. This frequently leads to positions becoming entrenched.
• Maintaining Relationships: Workplace disputes often involve colleagues who need to continue working together. Mediation helps preserve these relationships by fostering mutual respect and understanding, which formal grievance procedures rarely achieve.
• Confidentiality and Neutrality: Mediation offers a confidential forum where both parties can speak openly without fear of repercussion. This neutrality can be particularly valuable in cases where employees feel that managers or HR are too involved in the conflict. In harassment cases it is common for the victim to be reluctant to initiate formal grievances or to participate in disciplinary processes. Frequently they do not want the perpetrator to be punished, their key desire is for the unwanted behaviour to cease. 

Financial Implications of Unresolved Conflict for Employers

Unresolved workplace conflicts can have significant financial ramifications for employers. These costs are often hidden but can severely impact an organisation’s bottom line:

• Increased Employee Turnover: As noted above, unresolved conflicts lead to increased employee turnover which has very high associated cost.
• Lost Productivity: Conflicts can disrupt daily operations and lower productivity as employees focus on interpersonal issues rather than work tasks. It can be very difficult to measure the true cost of lower productivity as the result of unresolved conflict, but is likely to be very substantial.
• Absenteeism: Stress and dissatisfaction from unresolved conflict often lead to increased absenteeism. This not only reduces productivity but also incurs additional costs for temporary staffing and overtime.
• Legal and Grievance Costs: The financial burden of formal grievance procedures and potential legal disputes mount quickly. Management time spent resolving grievances adds substantial costs to the business, much of which is concealed and is rarely the subject of any detailed form of assessment. Attempts at undertaking conflict audits even on a ‘back of an envelope’ basis invariably produce eye-wateringly high figures for the true cost of conflict.

Practical Steps

Employment lawyers are in a prime position to recommend policy changes that enhance conflict resolution in the workplace:

• Encourage Policy Overhauls: Traditional grievance procedures often fail because they are rigid, adversarial, and focused on blame. Clients should be encouraged to overhaul their policies to focus on resolution rather than punishment. Policies should reflect a commitment to early resolution methods, such as mediation, as the default step before formal procedures are initiated.

• Promote the Role of Mediation: Employers should be assisted to integrate mediation processes into their conflict resolution framework. This could involve training internal mediators or engaging external mediation services for more complex cases. Some workplace mediation providers operate a co-mediation model where an internal mediator co-mediates with an external mediator.
• Invest in Training Managers: A significant finding from the CIPD 2024 Report is that line managers are often the source of conflict, yet many are not equipped to handle disputes effectively. Employment law specialists should advocate for comprehensive training in conflict resolution, so managers are better able to nip issues in the bud and prevent escalation.
• Emphasise a Proactive Approach: Solicitors should steer their clients towards proactive conflict management. This includes promoting open dialogue, regular feedback sessions, and fostering a culture where employees feel comfortable raising concerns early. This proactive approach can dramatically reduce the likelihood of grievances being filed.
• Develop a Clear Framework for Conflict Resolution: A well-defined framework should outline the steps employees can take to resolve conflicts informally. This might include facilitated discussions with HR or direct engagement with mediators. Solicitors should help their clients develop a clear pathway from informal resolution to formal grievance procedures, ensuring that all avenues for resolution are explored before escalation.
• Promote Fair and Transparent Processes: Fairness and transparency are critical in grievance procedures. Employees must believe that their complaints will be treated seriously and impartially. Solicitors should advise clients to review their existing procedures for potential bias or flaws and ensure they have a clear, documented process for addressing grievances.

Conclusion: The Need for Cultural Change

The CIPD 2024 Report highlights the disconnect between employers’ belief in the effectiveness of their conflict resolution procedures and the reality for employees. Formal grievance procedures alone are not enough to foster a harmonious working environment. By introducing early resolution processes like mediation, employers can create a workplace where conflicts are resolved quickly and effectively, leading to improved morale, productivity, and employee retention.

Employment law solicitors have a crucial role to play in shaping these reforms. By advising clients to embrace a culture of resolution, they can help organisations avoid the costly and damaging effects of unresolved workplace conflicts. It’s time to move beyond the formalities of grievances and adopt a more human-centered approach to conflict management.