Conflict can have both positive and negative effects within the workplace. According to Tuckman’s model of group development (1965) there are four stages that groups go through. These stages are forming, storming, norming and performing. These stages are cyclical and groups may go through each phase upon the start of a new staff member, organisational change, or when systems are not working. It is often when the transition to performing does not take place in which there may be negative consequences on the organisation and individuals involved.

When groups, colleagues, and individuals remain in the ‘storming’ phase, the degree of conflict can vary. However, the longer the conflict goes on the more it will escalate. When a conflict escalates so does the cost in terms of money, time and employee satisfaction and performance.

Organisational Costs

In the Employment Rights at work – Survey of Employees 2005 (DTI), 42% of respondents reported a problem at work in the last 5 years.

The cost of conflict can vary in every organisation, however, the more a conflict escalates without intervention the more the following may be seen:

  • Excessive employee turnover
  • Low morale
  • Reduced productivity
  • Delayed or missed deadlines
  • Damaged management credibility
  • Lack of trust
  • Passive/aggressive behaviour
  • Increased levels of stress
  • Increased levels of sickness absence

For every organisation the quantifiable cost of the above conditions will be different however, it is important to utilise early warning signs of conflict to create positive changes.

Economic Cost

It is estimated that the average cost for an employer defending a Tribunal claim is £9000.00 . This figure does not take into account any previous grievances and any amounts that may be awarded to the employee.

The costs may be seen in other ways such as sickness absence of the individual and others within the team or department. In some organisations formal mechanisms such as grievance and disciplinary procedures are often very stressful for the individuals involved, causing some employees to be signed off work by their general practitioner.

The cost of hiring may also be a factor in unresolved conflict. In some cases individuals may weigh up the personal costs of workplace conflict.


Managing workplace conflict can become very time consuming. As conflict escalates so does the time that is required by those directly involved as well as Human Resources specialists, Legal Representatives, Union Representatives, and management. The CIPD Survey (2007) suggests that each grievance case takes an average of 9 days of management and Human Resources time.

Current Trends

In March 2007, a report entitled Better Dispute Resolution: A review of employment dispute resolution in Great Britain addressed current problems in the Employment Rights (Dispute Resolution) Act 1998, and the 2004 Dispute Resolution Regulations. This report suggests that disputes should be handled earlier through informal mechanisms such as mediation, rather than through formal mechanisms such as grievance and disciplinary procedures or Tribunals as is currently happening under interpretations of the current regulations. It was recognised that these more formal processes are not only stressful but they are also often expensive in terms of economic and time taken, This results in both employees and employers being engaged in formal and stressful processes that are expensive in management time, and have often unnecessarily escalated the conflict.

Following this report the government is changing the way workplace conflict is dealt with in the United Kingdom. On 6 April 2009, ACAS produced a new code entitled ‘ACAS Code of Practice – Disciplinary and Grievance Procedures. This new code suggests that employers should consider the use of a third party to help resolve the problem. The third party may be internal as long as they are not involved in the disciplinary or grievance issues. It also states that in some cases the use of an external mediator may be appropriate.

Recent research into the establishment of an in-house mediation scheme at the NHS East Lancashire Trust indicate that, in a very short period of time, significant benefits were achieved through mediation. The actual cost savings by settling matters early and by agreement were notable. In addition there was a 60% reduction in formal processes (grievances and fair treatment cases), and of those cases that went on to mediation the success rate was a 96% settlement rate. It was also reported that the mediation scheme has had a positive impact on the attitudes of staff in dealing with conflict; managers, employees, HR and union representatives indicate that they are more likely to adopt collaborative approaches when faced with conflict, than the typical adversarial approaches of the past. (©Consensio Partners Resolution Ltd)


Alternative dispute resolution, including mediation, provides an effective way for parties to resolve a conflict before it escalates In the event that is has already escalated mediation provides a forum in which time and the cost of external processes can be minimised.

When used internally mediation provides parties with an opportunity to communicate and to be personally empowered to agree outcomes that work in their particular situation. Such outcomes are typically more sustainable as they are not only mutually acceptable but they are future focussed resulting in a productive working environment. This enables parties to recover from the ‘storming’ and enter ‘performing’ stage of Tuckman’s model.