Resolving Disputes in Business: An Intro for Managers

It’s important to resolve disputes in the workplace to make it a safe and comfortable environment for everyone. Learn what dispute resolution is and read examples of common workplace disputes.


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What is dispute resolution?

Dispute resolution refers to the different methods used to resolve employee and manager disputes. These methods help settle business and personal conflicts by addressing the issue and meeting a few of each party’s needs. Building a rapport, taking interests into consideration and applying indirect confrontation are common goals of dispute resolution strategies.

Related: Identifying Different Conflict Management Styles


Methods of dispute resolution

The goal of dispute resolution is to understand both parties’ sides and find a solution. There are many dispute resolution strategies to use, including:



This is a common method of dispute resolution used in many company contracts as the preferred dispute resolution strategy. An arbitrator is an impartial third party who listens to the concerns of both parties and submits their opinion on the case. The arbitration acts as a simplified version of a trial, excluding official documents and witnesses.



Another popular method to resolve conflict, mediation involves both parties discussing their disagreement with a neutral third party. The neutral person is usually an objective outside party who doesn’t know the two employees personally. They either speak privately with separate parties or bring both of them together for a discussion. The mediator works with the parties until they all come to an agreement or decision.



To use the negotiation strategy, both parties give up something they each want to come to a mutual solution. The solution usually isn’t what either party initially wanted but the end result is satisfactory for both of them.



The disputing parties meet with an outside party who listens to both sides and makes suggestions. The conciliator helps both people come to an agreement by adding input and recommendations to help everyone peacefully resolve these issues.



If the other conflict resolution methods don’t succeed, the final outcome is often litigation, which involves appearing in court in front of a judge and sometimes a jury. A defendant and plaintiff present their stories and evidence, which enters a public record. After hearing their cases, the judge or jury makes a ruling. Both parties hire lawyers who often work together to come to a negotiated settlement, sometimes before the trial begins.


Examples of disputes and resolutions in business

Here are some examples of common disputes and resolutions that occur in business:


Arbitration example

An employee believes they deserved a promotion their coworker received and refuses to submit work to them. Both the employee and manager explain their sides during the arbitration. The employee explains why they deserved the promotion and the manager describes their reasoning for promoting the other employee. The arbitrator states their opinion of the case for the final ruling.


Mediation example

An employee is angry because they received a poor performance review and believe they deserve a better review. The manager refuses to lift their performance review. During the mediation, the manager explains why their review was low and the employee describes their feelings about the harsh review. They both agree to improve their personality and performance to better work together and understand each other.


Negotiation example

A manager notices that an employee continuously arrives late to work. The employee explains they live far away from work and is late due to traffic. They negotiate a new plan which ensures the employee is putting in the required time just on a slightly altered arrival and departure schedule. 


Conciliation examples

Employee one is unhappy with the attitude of another coworker, employee two, and refuses to collaborate on projects with them. Employee two claims employee one talks too much about their personal life, keeping employee two from finishing work. Both employees meet with a conciliator who listens to each side of the argument and suggests ways they can better get along. They agree to stay positive when collaborating on projects and agree to discuss only work-related topics during business hours.

Related: How To Deal With Difficult Employees: Best Practices


Litigation example

An employee doesn’t receive a promotion and feels it’s because they’re discriminated against due to their gender. They conduct mediation and arbitration methods with their manager without reaching a solution. Both the manager and employee hire lawyers and prepare to appear before a judge to explain their cases. The employee, manager and lawyers meet before their case and come to a settlement they all agree on (e.g., compensation for the employee’s legal fees, the desired promotion).

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