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The Office Battlefield
The everyday experience of the small business owner is fraught with putting out proverbial fires on every side. This may mean dealing with a dissatisfied customer, or a supplier who wants to raise prices, or a bank loan officer who balks at issuing a new line of credit. But some of the worst and potentially most costly conflicts a small business owner typically has to address come from within the business itself.
When a small business’s employees find themselves in confrontation with each other, or with the boss, it can have a crippling effect on the entire business. The smaller the company, the greater the impact of a problem employee, making it all the more urgent for the small business owner to get a handle on the problem. The following presents some employee issues small business owners routinely face and some solutions for dealing with these thorny situations.
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Conflict Between Employees
Disputes between individual employees and between employees and their bosses can erupt in any office situation, large or small. But in small offices the magnitude of any interpersonal friction is greatly exacerbated by the close proximity in which the staff works.
Cathy McDermott, a bookkeeper at a small Boston firm says her experience exemplifies the way employee disputes can hurt a small business. McDermott found herself sharing an office with four other clerical workers, one of whom she took a great dislike to because of the off-color jokes he told. When she asked him to stop, he became offended and the hostility began. “It went on for months,” McDermott says. “I tried to avoid speaking to him, or overhearing him talk, but in such a small office it was impossible.” McDermott said she argued with the disagreeable co-worker. “Each time we had it out, I went back to my desk feeling angry and upset,” she recalls. “I couldn’t get work done right because I was still replaying the situation in my head.”
McDermott ultimately went to her boss over the situation. When the boss seemed reluctant to intervene, she left the company. “I hated to leave, but there wasn’t anything else I could do.” She says the tense atmosphere created by the conflict put a pall over the entire office. “I know people spent a lot of time trying to keep us apart.”
According to data from the Dana Mediation Institute, unresolved conflicts between employees account for as much as 65 percent of downturns in workplace performance. Worse, the institute calculates that a whopping 42 percent of a disgruntled employee’s work time can actually be spent arguing over the disagreement, or trying to fix it. That’s a considerable amount of time lost to work.
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The first step to dealing with a conflict between employees is simply knowing that one exists. Small business owners are often so involved in the daily operations of their businesses that they may fail to notice tension brewing right outside their office door. “Make sure that employees feel comfortable coming to you with problems,” advises management consultant, C. Davis Fogg. “The best way to do that is to listen carefully and not dismiss any complaints out of hand.” Fogg says that employers who cultivate an aura of approachability will be more aware of potential conflicts between their employees before they escalate into nasty confrontations or worse.
Once the tension has been discovered, bring all the employees involved in the dispute together to discuss the problem. Be sure to act as a neutral party. Try to get to the facts of the situation. Be sure to limit your criticism to the specific behavior of the employee rather than engaging in broad attacks on the employee’s character. Encourage both sides to genuinely listen to each other, and make sure each understands the other’s viewpoint. (Asking each party to restate what the other has said is a handy way of making sure the point was adequately conveyed.) Ask each side what they think would be the best solution to the problem and find a way to compromise. Be certain that each party understands what they have to do to work through the issue.
According to Fogg, one source of employee conflicts is vaguely defined roles. “In small companies, people tend to have overlapping duties, with one person juggling several roles,” he explains. In small offices this can sometimes lead to well-intentioned people stepping on each other’s toes because they inadvertently trespass on what another worker perceives as his or her job. Making sure your employees understand exactly what their job descriptions entail—and where tasks may be shared—will help prevent turf battles in your office.
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Conflict Between Employees And the Boss
You can’t very well serve as a neutral party when you find yourself in a dispute with one of your employees. If the situation is serious enough that the employee may leave the firm, you may want to consider calling in an outside mediator to help resolve the dispute.
According to Tim Hicks, founder and director of CONNEXUS Conflict Management, mediation can avoid costly and time-consuming litigation. “Mediation has significantly reduced the incidents of lawsuits against major employers and complaints to the Equal Employment Opportunity Commission (EEOC),” he says. Hicks cites research by communications giant Motorola, which found that offering mediation as an option in dispute management reduced litigation expenses by 75 percent.
“Mediation is very effective,” says Hicks, noting that the reported rate of mediation success is better than 60 percent. However, he notes that the greatest opposition to mediation sometimes comes from the parties involved. “People hate to turn to outsiders,” he says. “They see it as a sign of failure. It’s embarrassing to admit that you can’t solve a problem on your own.” This can be particularly applicable to small business owners who are used to solving problems by themselves. “But the benefits of calling in a neutral party are easy to see if it prevents even one lawsuit,” he adds.
A variety of mediation organizations exist to help small business owners work their way through internal dispute. Many provide training and consulting services to help businesses develop their own dispute mediation programs.
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Sexual Harassment
Few issues are more potentially disruptive or costly for employers than sexual harassment. The cost of a sexual harassment lawsuit can easily bankrupt a small business. The ripple effect of an incident of sexual harassment can polarize a company’s staff, increase tensions, and slow down work. According to Mary L. Boland, author of Sexual Harassment in the Workplace, and an Assistant State’s Attorney in Cook County, Illinois, sexual harassment is legally defined as 1) demanding sexual activity in return for being hired, keeping a job, or getting a raise or promotion; or 2) maintaining a hostile work environment. The second definition can cause all sorts of legal problems for employers since just one employee’s actions can create a “hostile environment” for another.
“The best way for an employer to deal with the threat of sexual harassment is to be proactive about it,” Boland advises. “Create a sexual harassment policy before an incident occurs and make sure every employee has read it and understands it. And then enforce it.” Having employees read and sign the sexual harassment policy is a good idea since it provides a permanent record that they were made aware of the policy.
Such a policy should lay out in detail the behavior that the company will not abide and establish a mechanism for employees who feel harassed to have their complaints heard and resolved within the company. Once a complaint has been made, it has to be addressed immediately. Any delay or effort to dismiss the claim may be construed as toleration of the harassment by the employer, which could later prove expensive in court. Firms that have a sexual harassment policy in place and consistently enforce its terms are usually able to successful defend themselves against claims of maintaining a “hostile work environment.”
In 2005, the EEOC says it handled 12,679 sexual harassment complaints, with some 85.7 percent of those coming from women. The EEOC meted out more than $47.9 million in monetary awards resulting from those complaints. This figure does not take into account damages awarded from separate lawsuits filed by the complainants against the defendant firms.
Boland says that the size and gender composition of a firm’s staff has no bearing on the possibility of a sexual harassment complaint. Successful sexual harassment claims have been brought against companies with same-gendered staffs.
Employee Misconduct
Employers occasionally find themselves faced with an employee who is caught or suspected of misbehaving in some serious way. This can be a particularly dicey problem for an employer, since like sexual harassment, it can lead to a lawsuit if mishandled.
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According to Shawn Smith, founder of Next Level Consulting, the first decision an employer must make is whether to investigate claims of employee wrongdoing in house, or to seek outside help. In general, Smith says, if there is an allegation of potentially criminal wrongdoing— theft, embezzlement, etc.—then the employer is probably better off retaining an attorney who can recommend an experienced external investigator. Employees have certain rights under the Fair Credit Reporting Act in such situations and a firm is best served by having legal advice on how to proceed. This is particularly true in situations where the misconduct may result in an insurance claim or in litigation against the firm.
Once an employee’s misconduct has been identified and proven to the employer’s satisfaction, disciplinary action must be decided on. The options at the discretion of the employer range from verbal warnings to suspensions, loss of duties, demotion or reduction in pay, or termination of employment. (Of course, in the case of criminal activity, the employer is legally bound to report the employee’s behavior to the police.) Communication is key, Smith says. Make sure the employee understands the precise misconduct for which he or she is being disciplined, and give the employee ample opportunity to respond to any allegation or explain his or her actions. “Putting everything in writing helps,” she says. To reduce the risk of lawsuits, Smith recommends consulting an attorney before terminating any employee for misconduct. “Document every step taken in the disciplinary process,” Smith suggests. “A complete record of your actions and any warnings you gave to the employee will support your case should you end up in court.”
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Lowering the Boom
Not every conflict can be resolved. Not every employee functions effectively in his or her job. Sometimes a particular employee’s failings cause so much disruption, or create such a drain on the firm’s finances, that letting him or her go is the only realistic option for the employer.
Firing an employee can be an emotional experience for a small business owner. Small staffs tend to create close relationships with each employee. No one wants to hurt someone they’ve come to know.
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“Consistency is the best rule for terminating employees,” advises Smith. “That means, make sure the steps you’ve taken prior to the dismissal have been clearly communicated, well documented, and are applied to everyone. Don’t treat employees differently when they don’t perform.” Unequal treatment can lead to litigation.
Once the decision to terminate an employee has been made, it is best to do it immediately and away from the rest of the staff to avoid embarrassing the employee and exposing the staff to any possible negative outbursts. “It is helpful to have witnesses, if possible,” Smith says. These should include the employee’s immediate manager or any other ranking employee of the firm. Following the dismissal, the employee should be given a short period of time to remove his or her personal objects from the workplace. Many firms choose to have the manager supervise that process to ensure that company property is not taken or vandalized during the process. Some employees find that humiliating, but Smith says it’s a balancing act for the employer—a choice between preserving the employee’s feelings and protecting the business.
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