by Clive Lewis, former HR Director and CEDR accredited mediator
March 2006

The front page of the business section of the Sunday Times, March 12 2006, detailed a rather public falling out amongst some of the key members of the board of Vodafone. The story being articulated wasn’t particularly unusual. In its simplest form, it appears to be a case of a relatively new Chief executive (Arun Sarin) attempting to put his mark on the business and run it in line with his conviction. However, other members of the board, including the current chairman Lord MacLaurin appear to have different views about the direction in which the company is going and the way in which it is being led. This dispute has now spilt into the domain of key investors who have themselves called a meeting with the Chairman to discuss the company’s lack of strategic direction. 

Although the detail may differ slightly, this type of scenario probably takes place in numerous organisations across the country. What was unusual about this one however, was the candid way in which we the public have had a blow by blow account of events. We have our good friends in the media to thank for this. 

A similar scenario unfolded before our very eyes a few years ago when a Chief executive of a well-known retailer went through a prolonged exit. The CEO was leaving the company with what was considered to be rather generous elements of his remuneration package, including bonus and pension, intact. The corollary of his departure made headline news because of what was being billed at the time as ‘reward for failure’. The Company’s performance during his tenure was viewed to have been less than staggering, this also being reflected in the share price. 

What many people don’t know however was that this particular scenario went to mediation. One day it was on the front pages, then it disappeared and nothing else was heard of it. Two of the countries most senior and experienced mediators were called in to try and resolve the dispute that had developed. They succeeded. 

The fact is that there will always be disputes at senior levels in organisations. People who occupy very senior positions in organisations are usually blessed with a personality where they are not backward in coming forward to express their feelings. This is often done with some force. 

Even if an employee dispute doesn’t hit the front page of the business section of The Times, it is likely to attract its own media within an organisation. An example of this is the smoker’s corner. Quite often, if you want the latest gossip on organisation happenings you need to listen in to the conversations that take place amongst employees who gather for their regular nicotine catch up sessions. Someone in the group will have heard about fallout and then has to demonstrate to fellow smokers that knowledge is power. Others replicate the same approach, now sharing it with less privileged non-smokers. Within a few hours you could have a workforce of hundreds talking about the dispute. Of course, while they are talking, they are probably not working.

Growing trend of workplace mediation

In the UK the use of mediation within the workplace has been steadily growing, with more employers using it as an informal method of dispute resolution. With an increasing number of employment related cases being drawn into the media spotlight, organisations can save time, money and quite often their reputation by engaging mediation skills early on when major disputes arise. 

But what is workplace mediation? Workplace mediation is based on the principles of encouraging constructive communication in a safe and confidential environment, identifying mutual solutions and agreements and restoring respectful, professional working relationships. It is a voluntary, confidential informal process that helps people who are in dispute start talking again, and to jointly agree how to work together better in the future. One of the real values of workplace mediation is that the process can take place, without any employment rights being lost. For example, if an employee is engaged in the tortuous grievance and disciplinary procedure, which came into effect in October 2004, they can still opt for mediation whist the disciplinary process continues. Mediation is ‘without prejudice’. 

For maximum effect, the mediator should be a neutral, third-party, and be seen as such by those with the dispute. The mediator should have with the skills required to cope with emotion, grievances and strong opinions. He or she must be a very effective listener and observer, as well as having the ability to understand the real cause and core of the problem. It is also important to be able to take the parties in conflict to a different ‘space’ of potential solutions. Integrity, neutrality and the dexterity to cope with crises, hidden agendas, long-standing conflict and animosity, as well as unexpected disclosures are absolutely essential. Disputes can often involve more than one party and be culturally diverse, so understanding the power and balance of the relationship is fundamental. In the Vodafone case for example the mediator would need to consider the views of the noted board members but also the key investors that are voicing their concerns. Workplace mediation skills can produce very sound and satisfying rewards. Helping people to overcome blockages and prejudices and to reach their own agreement, which may often involve significant movement on their part, invariably demands sensitivity, determination and patience. One of the most important factors is that the resolution of the dispute remains in the hands of the parties. The mediator will facilitate a process to help them get there.

The Business case

Figures from the last CIPD Managing Conflict at Work survey of 1,190 employers suggest that dealing with conflict is taking up more and more HR time. Over 60 per cent of respondents say they have seen an increase in the use of HR departments to resolve individual disputes in the past 12 months. And it is time-consuming and costly: employers say they are spending an average of 10.5 days per case dealing with disciplinary and grievance issues little less than the 12.5 days they say is spent preparing for a tribunal case. 

There are many reasons that can explain why workplace mediation is now becoming an increasingly used method of dispute resolution for employee conflicts. The high increase in the number of employee complaints, the higher levels of compensation, the continuing introduction of new employment legislation and, for many, the realisation that formal procedures and investigations can in some circumstances be so adversarial and stressful to all concerned that any possibility of people working together again is minimal. 

HR directors are often asked to justify various HR interventions. Workplace mediation has a sound business case. Conflict decreases productivity, whilst increasing stress and sickness levels. Mediation adds real value by taking these issues away without attracting huge legal fees. HR professionals are often best placed to deploy the skills required to be a successful mediator. But it is not an exclusive HR activity. Line managers of other functions can also become workplace mediators if they possess the key people interaction skills required to do so. 

The principles of mediation can also be used to support other areas such as

• Engaging key employees to collectively work towards business priorities
• Supporting the merger and acquisition process
• Helping to implement change
• Facilitating board level interaction

In summary

The Vodafone case is a great example of demonstrating the value that workplace mediation could add. It is a little unfortunate that due to the nature of the mediation process for handling disputes, its success is often not realised, due to confidentiality restrictions. However, the more it is used, the more the value will be seen by those who have used and the more it will be recommended as a valuable process to be adopted.

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.

by Clive Lewis, former HR Director and CEDR accredited mediator
Originally published in November 2004
How can mediation help smooth the way for organisational change to take place? Where the only thing that is constant in the 21st century is change, it helps when this happens smoothly. For organisations to remain competitive and maximise profitability it is inevitable that a degree of change will be required, often on a substantial level. Of course the asset impacted most when change needs to take place is usually human resources. 

As HR director of a technology organisation going through a substantial change programme I have recently experienced the value that mediation can bring to the change arena. 

The context was that the parent company wished to dispose of its two subsidiaries and reduce fixed costs to allow for one organisation with one purpose. As part of the process the organisation needed to exit a number of its senior individuals.

The CEO and I held initial discussions with affected individuals and I was asked to ‘work through the detail’. A traditional discussion would not have worked as it would have potentially protracted the process and been too inflexible. Mediated discussions took away immediate and potential issues and provided a cost effective solution.

Why mediate?

With an increasing number of cases hitting the media spotlight, organisations can save time, money and quite often their reputation by engaging mediation skills early on in the organisation change process. Often, senior HR professionals are not as involved as they should be in the planning stages of a major change programme. This is probably because people issues are not considered a priority during this stage. However, if handled incorrectly, the people issues are likely the most costly and time-consuming aspects to try and recover from. Unfortunately the tangible benefits of utilising mediation to smooth the way for organisation change are often most visible when things have not gone well. The media is littered with such examples. Executives will often only realise the true value mediated solutions could have brought when they are on the wrong side of the fence. They then have to repair the damage that would not have experienced, if mediation skills had been properly deployed.

Most organisations 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 is particularly the case when they themselves are personally impacted by the change. Key individuals can be leaders (but are not exclusively) or senior individuals who are likely to carry much weight through the organisation and often, the balance of calm or progress is at their fingertips. 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 and dealing with all people fairly and professionally during change 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 junior or middle ranking employees become aware of dissatisfaction engendered by a key individual it could have a devastating impact on the future commitment of employees an organisation may want to retain and keep engaged.

As it became clear that certain key individuals would be exiting the organisation (in this instance a number of directors), mediation skills played a vital role in ensuring a smooth course of change took place. Much of the mediator’s role is to:

• Encourage a trusted relationship with the parties
• Encourage win-win negotiations
• Assist the parties to work to acceptable solutions
• ‘Reality check’ possible solutions and alternatives to settlement

Based on the above, a number of ‘mediated discussions’ were held. These started with the individual ranked as the most influential. All stakeholders recognised the requirement for change, which was a great starting point. The concluding position was that compromise agreements were reached, incorporating of course, the appropriate legal representation. In most cases, termination packages were comfortably into six figures and any future employment dispute against the company was effectively safeguarded against. 

But it became clear that it was not only senior individuals who should be classed and treated as key. One example of this was where there were two employees on long-term sick leave. The status of these employees meant that the due diligence process for one of the subsidiary disposals was being held up. The company had to act quickly in a pragmatic way to bring an acceptable resolution to both parties. The arrangements included home visits in the presence of nominated representatives to discuss possible solutions. ‘Settlements’ were reached within a surprisingly short timescale. 

Another example involved reaching settlements with individuals who benefited from generous TUPE arrangements, resulting from a joint venture with a former government department. Even with active union involvement, mediation brought an agreeable and practical solution, keeping the commercial needs of the business as top priority.

These examples illustrated the use of mediation as a genuine value-added, cost effective tool that could be used to help the organisation achieve its objectives whilst not needing to worry about revisiting any issue in future months – such as preparing for tribunals or facing legal claims. 

In these instances, mediation was used as a method of helping a number of people leave the business. This is not, of course, always the outcome one would desire or use mediation for. The principles of mediation can be used to assist people issues in other ways such as:

• Managing conflict
• Preserving positive working relationships
• Engaging key employees to collectively work towards business priorities
• Increasing effective working at ‘top level’
• Merger and acquisition process

A mediation approach goes a long way towards preserving good relationships between employee and employer. For example, many of the discussions referred to were held in a non-threatening environment i.e. away from the workplace. This encouraged affected individuals to be less defensive than perhaps they could have been within a work setting. The outcome for these conversations was ultimately going to lead to departure. However, the personal attention and flexibility of approach individuals received meant that dignity was preserved and goodwill was retained. A measure of this was some of the expressions of gratitude received for the ‘way it was handled’ after a satisfactory conclusion had been reached.

Benefits

The financial benefits of using mediation skills to assist organisational change can be substantial. Of course, benefits can also be measured indirectly in ways such as management time, employee goodwill and company reputation. 

Employment tribunal awards of six and seven figure compensation sums are now common. A lawyer from a leading investment bank was recently awarded £1m after her case was taken to employment tribunal. With new changes in employment legislation ever more likely, the number of cases of fallout and dissatisfaction are likely to proliferate. Unfortunately for employers, the media does a superior job at broadcasting such cases. Human resources directors and other heads of functions are increasingly required to provide justification of costs. It appears that there could be a major role for effective dispute resolution (in particular mediation skills) to add value in the workplace and have a positive impact on the bottom line. 

In summary

Mediation should not be considered as a soft option or easy way out, but a sensible and practical solution that can help oil the wheels of what organisations are now accepting is part of every day activity – managing change! Such change is not always viewed as positive or is indeed welcome by all, but engaging individuals and establishing dialogue to reach solutions can overcome blockages and resistance on a sustainable basis.