Conflict Management

Conflict in any organization is inescapable, and managers spend a sizable amount of their workweek managing conflict. An organization's bottom line can be significantly affected by unresolved conflict in terms of lost productivity, employee turnover, reduced employee morale, and increased litigation. People who effectively manage conflict are perceived as more competent managers than those who cannot. In addition, effective conflict management increases employee perceptions of fairness and job satisfaction, reduces worker stress and health-related problems, and results in fewer employee lawsuits (Jameson, 1999).

The cost of conflict to an organization can be enormous. Possible variables to factor into a cost analysis include amount of wasted employee time (calculated as a fraction of total monthly compensation, including benefits), employee turnover costs (150% of total annual compensation to account for recruitment, hiring, training, and so on), sabotage/theft costs, reduced job motivation (usually estimated by a percentage of annual salary), and days lost because of stress-related health issues and absenteeism. For example, consider an ongoing conflict between two staff nurses (each earning $6,000 per month in total compensation) and a hospital pathologist ($18,000 per month total compensation). This conflict results in all three workers wasting 8 hours per month for three months, and ultimately causes one nurse to find other employment. Using conservative estimates, the unresolved conflict results in a $112,500 loss to the hospital:

• Cost of nurses' wasted time: $6,000/160 work hours per month × 24 hours over 3 months × 2 nurses = $1,800
• Cost of pathologist's wasted time: $18,000/160 work hours per month × 24 hours over 3 months = $2,700
• Replacement of departing nurse: $72,000 total compensation × 150% = $108,000

A conventional definition of conflict is any situation where there are discordant goals or ideas between individuals or groups. Conflict arises for a multitude of reasons, including differences in values, attitudes, and perceptions; incompatible goals and objectives; miscommunication; unclear job boundaries; misattributions of others' motives; and competition over limited resources. Many people perceive all conflict as destructive and something to be avoided. In fact, conflict may be either positive or negative, depending on its outcomes. Negative or dysfunctional conflict occurs when an individual's or group's productivity is impeded, morale is undermined, and people become more polarized on issues. Positive or constructive conflict clarifies important issues, generates better-quality decisions, and creates new ideas (Thomas, 1990).

When seeking to manage conflict, the goal is to minimize dysfunctional conflict and maximize constructive conflict. Conflicts can be made more constructive by discovering the root cause of the issue, to correct misperceptions and miscommunications. In addition, an atmosphere of collaboration can be built by emphasizing common goals and objectives held by the involved parties. Increasing the amount of information shared, in terms of both quality and quantity, is also key to managing conflict. Organizations [Page 100]can help manage conflict and its impact on performance by sponsoring team-building activities, mandating negotiation or conflict management training, encouraging regular staff meetings, and formalizing a dispute resolution process.