WORKPLACE CONFLICT AND ITS EFEFCT ON PROFITABILTY

 Conflict by itself is not necessarily dysfunctional. Functional conflict is at times needed to improve organizational systems and may need to be deliberately orchestrated. However, once unplanned and unmediated, it becomes dysfunctional and has dire consequences on the health of any organization by way of profitability and the employees as well, both physically and psychologically.

Conflict according to the Dana Mediation Institute is a “ condition between people who are task interdependent, and where one or both feel angry, and find fault with the other, and use behaviours that cause a business problem”. Such conflicts are inevitable once we have people from different backgrounds, race, religion, sex, personalities and behaviours coming together and expected to work together to have a shared vision in achieving a common goal.

We will be having a conversation on the negative effect of unresolved workplace conflict, dysfunctional conflict, on profitability. It will not be about resolving it, which will be for another conversation but rather the awareness of it. To be able to solve a problem is to first be aware and acknowledge that there is a problem and that is what this conversation will be about, the triggers and behaviours of workplace conflict that have consequential negative effect on profitability.

TRIGGERS AND OR BEHAVIOURS OF WORKPLACE CONFLICT

Employees are task interdependent and once they have different personalities, behaviours and communication styles there are likely to be blips, clashes and crisis. Depending on the trigger, these could be ignored if they are just blips but have to be mediated if it develops into clashes using preventive mediation, self-mediation, managerial mediation or executive mediation. Once it has the potential of becoming a crisis or develops into one then the services of an expert mediator would have to be employed.

If there is no task interdependence between two people in the workplace, then there is not likely to be a conflict to be worried about. Assuming a company has consultancy and transport subsidiaries located at different locations and there is no collaboration or linkage between them but two people (friends) in the two subsidiaries are angry at each other and find fault with each other for whatever reason with behaviours that looks like a conflict. This is not likely to cause a business problem and stricto sensu not a workplace conflict situation since the situation does not satisfy the conditions in Dana Mediation Institute’s definition of conflict. The key word for me therefore to recognize a potential workplace conflict situation that should be of concern and cured is the existence of a task “interdependent” relationship. It may of course be a conflict but not a workplace conflict.

To be able to recognize and situate appropriately conflict in the workplace, to quote Dan Dana “Daily brushing and flossing should not be confused with professional dentistry” hence daily disagreements or misunderstandings between two interdependent people in the workplace should not be confused with workplace conflict until it degenerates into observable behaviors of a fight mode by way of threats, shouting, hostile gestures and to the extent of getting others to take sides. There are also below the water iceberg issues of the parties being in flight mode by way of avoiding each other, withholding information and not returning work related messages between themselves. This should also be of concern as a workplace conflict situation.

We need to be able to recognise these wrong reflexes of “Distancing” or “walk-aways” and “Coercion”” or “power-plays” between employees who are in task interdependent relationships either intra-departmental or inter-departmental which could result in large scale organization wide crisis if not mediated.

Disciplinary situations such as breaking of rules and regulations, absenteeism, lateness to work are not in themselves conflict situations unless that behavior is affecting a task interdependency with another person who is showing wrong reflexes that will result in a business problem. If Ama’s output is Kofi’s input and Ama’s lateness is causing Kofi not to be working effectively hence starts to have verbal loud confrontation with Ama, then it has the potential of causing a business problem. In effect there is a causation between the lateness and workplace conflict between Ama and Kofi which has to be mediated but the lateness itself by Ama is a disciplinary issue that has to be dealt with under the organisation’s normal disciplinary procedures.

The negative behaviours from unmediated workplace conflict will eventually have a negative effect on the bottom line of the organization with respect to profitability.

EFFECT ON PROFITABILITY

Conflict in the workplace may on the face of it seem to be just between two people hence their problem to resolve. What may seem to be a blip, can escalate to a clash and eventually a crisis situation will be eminent at great cost to the organisation. I will be using a working environment of a typical bank branch to illustrate the negative impact of workplace conflict that leads to reduction of profits by way of the following:

·       Poor Customer Service and Loss of Business

In a typical bank branch, the tellers, front office, are supported by operations, back office, to deliver service to customers. In a situation that an operations staff who is to make sure cheques above the teller’s limit are duly authorized by the branch manager to be paid by the teller delays the process unnecessarily because the teller and operations staff have a conflict, it has the tendency of creating long queues in the banking hall, customer agitations and poor service delivery. If this consistently happens and remains undetected by the branch manager, for the cause of the long queues to be resolved, some customers will stop conducting business with that particular bank to do business elsewhere, if they operate other bank accounts.

·       Wasted time in resolving the conflict

If the branch manager detects the conflict by observing wrong reflexes between the two parties and decides to mediate, this conversation is most likely to be done within working hours. The manager’s time as well as that of the two parties will have to be used in this conflict resolution process without directly serving customers or doing what they are each supposed to be doing. Though the times used to resolve the conflict will eventually be worth it from the manager’s point of view, it is a waste of productive time which could have been put to better use if there was no conflict.

·       Opportunity Cost In Resolving The Conflict

A customer calls the branch manager to come for deposits of GHS500,000 but the manager needs to at the same time immediately deal with the conflict to restore the service delivery issue before the day starts.  Instead of going out for marketing to get the deposit decides to mediate the conflict. The opportunity cost of staying to mediate the conflict is the deposit of GHS500,000

·       Loss of investment in skilled employees

The branch manager is unable to detect the conflict and it kept affecting the tellers work and performance appraisal which leads to the teller being put on a Personal Improvement Plan (PIP). The teller with over ten years’ banking experience and investment in training of the bank’s new software resigns because she found it unfair and stressful. At this point the bank would have lost all the investment in such a skilled staff and there is also going to be the added cost of recruiting a replacement staff.

·       Health cost

The teller decides not to say anything on the causes of the delays in the banking hall since the operations staff is related to the managing director for fear of losing her job. This situation is likely to be emotionally traumatic on the teller when she is being reprimanded with queries for the delays in paying cheques and long queues. It then becomes a stressful situation which affects the health of the teller. She starts attending to the hospital for which the bank is of course paying.

·       Sabotage

The operations staff is obviously sabotaging the work of the teller without thinking of the negative effect on the branch performance as a whole. Service delivery has suffered, customers and deposits lost.

·       Interdepartmental conflict

At this point, the rest of the tellers have decided to side with their colleague and the operations staff are also in solidarity with their colleague. Now the front office and back office are on a war path. A conflict that just started between two people, not detected to be resolved has turned into a branch crisis situation.

·       No teamwork and Innovation

The front and back office staff are supposed to be working together to provide a seamless service to customers of the branch and meet branch business targets. The interdepartmental conflict situation will definitely affect teamwork and innovation in improving branch performance.  

·       Increase in operational risk

Once the branch staff, front and back office, are in conflict with no teamwork, there will not be cooperation and collaboration in getting the job done. Mistakes made by the front office will not be detected and vice versa. Call over of the previous day’s work by the operations staff of the tellers’ work will not be done with the needed due diligence which will lead to operational risks to the branch. Errors and possible fraud will go undetected and eventually affect the bottom line.

CONCLUSION

Once people of diverse background are recruited to work together there is bound to be conflict between them in the workplace. Such conflict unmediated by way of preventive mediation, self-mediation, managerial or executive mediation has the tendency to result in organization-wide crisis at great cost to the organization and eventually profitability.

Cognition of conflict situations, recognition of the emotional response and subsequent behavior that is likely to cause a business problem is a leadership competence that an organization should deliberately build capacity, and invest in. Thus, workplace conflict should not be left unresolved.