We all know Abraham Maslow for his hierarchy of needs.  He is also known for another theory: the theory of the golden hammer.  This is a cognitive bias whereby, as he put it ‘I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it is a nail’.

A recent ACAS survey identified that, for employers, their primary objective in dispute resolution is to avoid a tribunal claim.  This is understandable.  The Tribunal system is slow, expensive, time consuming and stressful. 

However - and this is Maslow’s golden hammer - the only way that many employers can now see of doing that is to make a payment to the employee (or ex employee) via a settlement agreement or via ACAS.  It is understandable that an employee will take the money – they need to eat, pay the rent etc.  Settlements are usually cheap for employers – a relatively small amount of cash to the employer can represent a payment of many months’ pay to the employee (particularly when tax advantages are factored in).  The formal and institutional systems that are in place also encourage such an approach (think of the role that ACAS plays in pre-claim conciliation, for example).

What are the consequences of this for organisations, and for their employees?  There are situations where I think it is right for employers to pay up rather than go through due process: redundancy consultation exercises for example are often, unavoidably, a sham.  They can have detrimental effects on the employees who can be put through weeks of uncertainty and stress for no good purpose.  Or performance management exercises, where the system of monitoring and target setting for a floundering employee is at best ineffective, and at worse cruel (and often has psychological consequences).  Very senior managers are another case in point, where drawn out processes are usually counter-productive and a quick settlement is to be preferred.

However, there are many cases where pay-offs may make sense individually, but they are used so frequently that they diminish the culture, productivity and success of the organisation.  The desire to avoid litigation means that the benefits of other approaches, or at least equipping managers with a wider range of conflict management skills, can be lost.  I was reminded of this when speaking to a client this week.  The company has recently been sold for a nine-figure sum, having only started up in the last four years.  They have applied an exceptionally diligent approach to their culture and values and have had a clear mission that has informed all of their decisions.  This has promoted psychological safety, which in turn promotes healthy conflict and keeps an organisation moving forward.  They have avoided the trap that many organisations fall into, which is to confuse conflict with disputes.  Disputes are seen as needing to be resolved before they become legal disputes, and the easiest way of doing that is by settling them.   

So, what am I advocating?  I think that organisations need to stop fixating on seeing the solution to disputes or conflict as being to buy out those claims, or to see them as battles to fight.  We need to move the focus away from the legal landscape and back on to what matters for the organisation and its mission.  There are certain initiatives that can promote this, and in doing so, provide much more effective dispute and conflict management strategies.

The Conflict Management Strategy Alternatives

First, review your disciplinary, grievance and related procedures (the lot – whistle-blowing, equality and diversity etc.).  If they are written to a standard template then they are going to polarise: they pit the employee against the employer, and that polarisation increases as the process progresses through its formal stages.  Start again.  Look at what works in your organisation keep as simple as possible.  Look at how they can promote common interests, rather than isolate the employee.  If you must get a legal review then make sure that you instruct your lawyer to identify the minimum compliance measures required.  Don’t let them fob you off with a standard template. 

Second, train managers.  By training, I don’t mean educating them as to the horrors of employment law or how to avoid harassing someone.  Instead train them to negotiate and interact.  Make them see that a key part of their role is conflict resolution.  There is a growing body of work that recognises the inevitability of conflict within the workplace, and that it is a healthy dynamic.  Train them how to deal with vulnerable or under-performing employees; help them to identify and manage unhealthy conflict – bullying, harassment etc., and to be bold in addressing it.

Third, look at more formal interventions.  Workplace mediation is one of many initiatives that can be used to resolve disputes without resort to lawyers or the legal process.  There are others.  However, these are only effective if they are built into the fabric of the workplace culture, and that they can be used swiftly and effectively.

Finally, if you need to settle – and there will always be cases where settlements are the best way forward – then understand the dynamics at work.  Most negotiations – particularly if conducted through lawyers – focus on assertions as to the legal rights and wrongs of each parties’ position.  In reality the factors and dynamics at work are more complex and personal. Understanding what these factors are, and the role that they play – will give you an edge.

Am I worried that by advocating this more holistic, less lawyered, approach I  am going to put myself out of work?  Not at all.  I would love clients to realise that we can do more than wield a hammer, and help them achieve their aims by having healthier, happier workplaces.

Matthew Cole specialises in Employment Law, and also Data Protection and Information Security Law.