by Clive Lewis, former HR Director and CEDR accredited mediator
Originally published in December 2004 

HR professionals seem to be faced with the constant challenge of demonstrating how their functional expertise adds real value to their business. We often hear new HR speak, but as these areas come and go, do they make any difference to lives and organisational effectiveness? In the past 10 years for example we’ve heard about NLP, mentoring and now coaching to name just three. Now a seemingly new term has raised its head – Employment mediation.

Mediation has been practised in the US since the 1960′s. When the term mediation is used, most people probably think of things on two very opposite ends of the spectrum such as matrimonial disputes, or the UN’s role in cross-border dispute resolution. But, increasingly mediation is being used as a method to help solves differences and conflict in the business arena. 

Although painful and maybe embarrassing for the parties involved, encouraging the settlement of disputes through dialogue without the presence of an individual in a white wig has been proven to be an acceptable route to follow. 

The number of organisations choosing to use mediation to help solve employment disputes has been rising steadily over the last few years. Countries like New Zealand have had a statutory employment mediation process since the late 1980′s and are now well versed in handling disputes in this way. But, does mediation in the field of employment really add value or is it just another fad being used in the HR world? 

The changing landscape

The field of employment is doing very well at adding to the legislative arena of the UK’s judiciary. For example we have recently had the introduction of bullying and harassment legislation, anti discrimination legislation, sexual orientation and religious beliefs legislation and the need to follow formal disciplinary grievance and disciplinary process to name just a few. It is becoming more and more difficult for HR generalists to keep abreast of UK employment law and as a result organisations need to retain in-house lawyers, specialist employment teams or outsource employment law issues to third parties. One of the reasons for doing this is that organisations realise – mainly through the proactive role played by the media – the costly implications of making wrong decisions or failing to follow correct procedural process. At the same time, employees are only too aware of the power they can yield over their employers and are often only too willing to use, or at least threaten, to use this power to potentially bring harm to their employers. 

The business case

Research has shown that a huge cost is associated with handling disciplinary or grievance issues. The recent CIPD Managing conflict at work survey report highlights that:

• On average there are 30 formal disciplinary cases and 9 grievance cases per year per employer
• In total, internal staff spend an average of 10.5 days managing disciplinary and grievance cases
• Where employers train in mediation skills they are more likely to have fewer disciplinary and grievance cases

It is probably unlikely that Chief Executives welcome any lowering of productivity levels at a time when shareholder value and shareholder return are very high on the corporate list of objectives and measures for success. Of course, where the organisation has done an exemplary job in following correct procedure, and is therefore convinced that it has every right to defend itself as a commercial business treating people fairly, it has every right to take tough decisions where required in order to help it maximise shareholder value. 

Where organisations cannot be so bold, exploring mediation may be a pragmatic cost effective solution to help all concerned move on. 

Although perhaps the most obvious need for employment mediation is to prevent the pain and distress of an employment tribunal or court process, practitioners have been using the skills associated with mediation in the field of employment in other areas such as helping organisation change and dealing with conflict. 

Individuals who are in the world of work in the 21st century would do well to recognise that the only thing likely to be constant with the organisation they are associated with is change. With change being an integral part of the organisational backdrop, using a process to help oil the wheels for any change can only be good news. We have seen only too often the effect of what happens when change is handled badly. One of the latest methods of expressing discontent is for employees to voice their concerns, or vent their anger, through employee ‘Blog’ websites. Although freedom of expression and employee feedback should be welcomed, this is probably not the forum in which it should be aired. 

One of the strengths of using mediation to help the process of change is that it can be used with key individuals to help prevent derailment of any kind. 

Organisations are likely to have key individuals who are able to either help or hinder the process of change by the attitude they display toward the change agenda. This may be particularly more acute when they themselves are personally impacted by the change. Key individuals can be (but are not exclusively) senior individuals who are likely to carry much weight through the organisation. Other individuals, who are akin to a disposition of being difficult, or have an issue that could prove difficult to handle but are not necessarily senior, may fit this category. 

Getting key individuals on your side can pay huge dividends. Key individuals can play a major role in holding up the change process and preventing a new vision or way of working being established. If other employees become aware of dissatisfaction with a key individual it could have a devastating and rippling effect on psychological contracts and future commitment amongst those an organisation may want to retain and keep engaged.

Case study

As an Ex HR director in the private sector myself, I have experienced first hand the added value that mediation can bring in an organisational change context. The organisation needed to change from being a parent company with two subsidiaries to one business. This involved the disposal, through MBO, of one subsidiary and equity dilution of the other, relinquishing the burden of day-to-day management and statutory reporting. We also significantly reduced the number of employees in the remaining core business.
As mediator, some key parts of my role are to:

• Establish a trusted relationship with the parties
• Work towards win-win solutions
• Help the parties work towards acceptable solutions
• Reality check and explore possible alternatives to settlement

This process quickly highlighted key individuals for whom a traditional discussion would have no doubt protracted the course of action. This included things such as agreeing compromise agreements with senior individuals and agreeing settlement terms with employees on long term absence who were holding up the due diligence process. We also used the skills of mediation to reach agreements with employees who were entitled to rather generous TUPE terms and conditions from a previous joint venture we had negotiated with a public sector employer. This aspect also included union representation. 

Through using this approach, the business was able to effect change in a relatively short period of time. There were also added employee relations benefits such as; 

• reducing conflict
• preserving relationships and
• establishing common thinking amongst the remaining senior team
• saving money

A rewarding measure of the success of managing the transition when a senior employee looked me in the eye shook my hand and thanked me for the way the process had been handled. He moved on with his ‘integrity intact’ 

On the point of saving money, the HR function was able to demonstrate how it saved the business a considerable six-figure sum from using this approach. 

Summary

The business case for employment mediation is sound. The potential for it to add real value also appears to be evident. The challenge for organisations is to ensure that this emerging area does not become an obscure set of skills only retained by individuals within the HR function, but a pragmatic method that line managers can also use to ensure that organisations remain effective. 

If an organisations’ competitive advantage lies within its people, one would envisage that it would be beneficial investing in the development of mediation skill sets. 

Well, it seems that this may not be a fad after all, but a real opportunity for organisations to consider against areas such as marketing, loss prevention, sales and logistics as being a business to focus on to enhance the top or bottom line.