In the workplace, misunderstandings, power struggles, and stress can cause conflict to fester and take a toll on productivity. The best organizations put in place conflict management processes and systems to confront conflict directly. Unfortunately, too many organizations fail to do so—and suffer the consequences of sweeping conflict under the rug.
Take the case of Paradigm Capital and its owner, Candace King Weir, which were fined $2.2 million by the Securities and Exchange Commission (SEC) for retaliating against James Nordgaard, an employee who blew the whistle on tax-avoidance strategies that Paradigm carried out for the hedge fund PCM Partners. PCM Partners was not notified that a conflict of interest existed between Weir and a company she owned, CL King & Associates, as reported in Operational Risk & Regulation.
In particular, the SEC faulted Paradigm for not having outsiders on its conflict-resolution committee, a structure that appeared to contribute to the retaliation against Nordgaard. Nordgaard was demoted from head trader to compliance assistant and otherwise marginalized after reporting the wrongdoing he observed to the SEC. It was the first penalty handed down by the SEC’s new whistleblower protection program.
A very different type of workplace conflict sprang up recently when workers at the Book Culture independent bookstores in New York City voted to unionize on June 24. Soon after the vote, the stores’ owner, Chris Doeblin, fired five employees for joining the union. Doeblin stated categorically in an email to employees that he firmly opposed unionization.
On July 2, most of the store’s remaining employees reacted by going on strike, picketing the stores “with the help of the union and its giant inflatable rats,” Rachel L. Swarns reports in the New York Times. Sales plummeted as the news of Doeblin’s anti-union stance and action spread through the liberal Manhattan neighborhood where the stores are located.
Fortunately, Doeblin worked to defuse the situation quickly rather than escalating it: He called the union to work out a deal, which was hammered out within a day. Doeblin agreed to rehire four of the fired employees, to give a severance package to the fifth employee, and to recognize his employees’ right to uionize. The union, in return, agreed to end the strike and calls for a boycott and to drop a complaint it filed with the National Labor Relations Board.
The brouhaha led Doeblin to look inward, the Times reports. Acknowledging that he has a brusque, intimidating style with employees and was “probably not a very good manager,” the bookseller said he had “a lot to improve on.”
When employees feel they are not being heard or respected, they may go to great lengths to get management’s attention. Doeblins’ employees, for example, sought out the union for help negotiating wages, raises, and promotions, and establishing a grievance process.
By setting up a formal conflict resolution process, managers can use negotiation, mediation, and other tools to attempt to settle grievances in house before they escalate to the point of lawsuits, labor complaints, and other costly and time-consuming means of conflict management.