Conflict resolution ranges from informal, non-legally binding methods to more structured legal procedures. All of them apply to workplace conflict, and all of them can help organizations avoid lawsuits and other legal battles. Some of the most common forms of conflict resolution are negotiation, mediation, arbitration and mediation-arbitration, and all of them focus on solving the conflict with the best interests of all parties involved in mind and avoiding court.
If the conflict isn't too severe, simple negotiation might suffice. With this process, the conflicting parties agree to discuss their concerns with each other openly. They might share precisely what actions, practices or policies they are upset about and make suggestions about how the conflict can be resolved. As part of the conflict resolution, the involved parties typically agree to work together to find a compromise with which they all feel comfortable. This usually is an informal process, perhaps consisting of a meeting between the conflicted parties and a member of the senior management.
If the conflict has escalated, mediation might be more effective, especially if the parties can no longer communicate or work together. Business mediation involves hiring a neutral third party to facilitate a discussion between the people involved and help them reach a solution. The mediator does not have any legal power over the final decision but instead acts as a middleman, encouraging all parties to open up about their concerns and urging them to agree to a solution as soon as possible. The mediator can be someone within the organization, such as a manager, or the company can hire someone from outside the company to oversee conflict resolution.
Business arbitration is similar to mediation in that it involves bringing in a third party to facilitate discussion and a solution. It differs in that the mediator has the legal power to determine the solution. The arbitrator talks to everyone involved about the situation and then makes a decision. The parties involved have no say over the decision and are bound by whatever the arbitrator decides. Arbitration might be necessary if the conflict has escalated so much that there is a great deal of hostility between the people in conflict.
Mediation-arbitration combines these two approaches and offers greater flexibility in conflict resolution. The involved parties first try to resolve the conflict with mediation, but if that doesn't work, the mediator makes the final decision. The organization and the people involved typically agree to a set amount of time to settle the dispute without turning it over to someone else to make the decision.