From small businesses to large companies there is always a chance of conflict arising in the workplace due to the nature of people having to work together. Workplace conflict is a disagreement between people at work, and employers can address it by identifying its cause, choosing an appropriate informal or formal approach, and acting early to prevent escaltion to more serious concerns. According to the "Managing and Minimising Psychosocial Risks in Australian Workplaces" report by the Australian HR Institute 23% of employers reported Conflict or poor workplace relationships as a leading psychosocial hazard. It's important that employers know how to handle conflict resolution and how to implement conflict resolution techniques to avoid these occurrences becoming a bigger problem. In this guide, we'll break down how conflict can occur and strategies for resolving conflict in the workplace.
Key Takeaways
Before diving into the guide below, here are the key points employers should understand about workplace conflict and conflict management:
- Workplace conflict can occur between individuals, groups, or across an organisation.
- Early intervention is often the most effective way to prevent issues from escalating.
- Informal approaches, such as direct conversations and mediation, can resolve many workplace disputes before formal processes are required.
- Formal conflict management processes may be necessary where serious allegations, misconduct, bullying, or unresolved disputes are involved.
What Is Workplace Conflict?
To start implementing conflict management in your workplace it's important to first understand what workplace conflict is and how it can occur. Conflict can be defined as an active disagreement between people with opposing opinions or principles. How this manifests in workplaces will depend on who is involved in the conflict itself and whether it is between individuals or specific groups within the workplace.
Types of Workplace Conflict
Workplace conflict can occur at different levels within an organisation. Understanding the type of conflict involved can help employers and managers select the most appropriate resolution strategy. Below is an outline of the main types of workplace conflict businesses are likely to encounter.
Individual Conflict
Individual conflict occurs between two people and is often driven by personality clashes, communication breakdowns, misunderstandings, or differing working styles. Because these disputes can be influenced by emotions and perceptions, they may have a direct impact on workplace relationships if left unresolved.
Common causes include:
- Personality differences
- Poor communication
- Misunderstandings
- Differing work styles or expectations
- Interpersonal tension
Group Conflict
Group conflict occurs between teams, departments, or workplace groups. Unlike individual conflict, it is typically less personal and more focused on competing priorities, objectives, resources, processes, or viewpoints.
When managed effectively, group conflict can encourage healthy debate, innovation, and better decision-making. However, unresolved group conflict can reduce collaboration and productivity.
Common causes include:
- Competing priorities
- Resource constraints
- Differing goals or objectives
- Process disagreements
- Cross-functional communication challenges
Organisational Conflict
Organisational conflict arises when employees or groups disagree with broader organisational decisions, policies, leadership actions, or workplace change initiatives. These disputes often extend beyond individual relationships and can affect the wider workforce.
Examples include disagreements about restructures, changes to working arrangements, new workplace policies, remuneration decisions, or perceived unfair treatment.
If not addressed appropriately, organisational conflict can lead to decreased engagement, formal grievances, industrial disputes, absenteeism, or increased employee turnover.
Common causes include:
- Organisational change
- Policy implementation
- Leadership decisions
- Restructures or redundancies
- Perceived inequity or unfairness
- Changes to working arrangements
Identify The Cause
As outlined above, workplace conflict can arise for many reasons, ranging from simple misunderstandings to significant organisational changes. Organisational strategies for resolving workplace conflict should start with Identifying the underlying cause as the first step towards resolving a dispute effectively.
| Example | Cause |
|---|---|
| An employee misunderstands a manager's instructions and submits work that does not meet expectations | Communication Issues |
| Different communication styles cause misunderstandings during meetings | Personality Differences |
| Two team members believe the other is responsible for completing a critical task | Unclear Roles and Responsibilities |
| A team member believes they were unfairly overlooked for a promotion | Perceived Unfairness |
| An employee believes they have been incorrectly paid for overtime or denied a workplace entitlement | Employment Conditions |
Informal vs Formal
Employers and managers should consider how to handle conflict resolution depending on the nature, seriousness, and impact of the workplace conflict as the right approach can vary. This can be split into an informal vs formal approach to conflict management. Use informal resolution for minor, low-risk disagreements when both parties feel safe and willing to participate. Use a formal process for allegations of bullying, harassment, discrimination, violence, serious misconduct, safety risks, or where a formal complaint is requested. If unsure, seek independent HR or legal advice before proceeding.
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Informal Conflict Management
Informal conflict management focuses on resolving concerns quickly through discussion, coaching, facilitation, or mediation before the conflict escalates.
Informal approaches are generally suitable where:
- The issue is relatively minor
- Relationships can be repaired
- There are no serious allegations requiring investigation
- Both parties are willing to participate
Informal Conflict Resolution Techniques
Direct Conversations: Employees discuss the issue directly to clarify misunderstandings and identify solutions.
Manager Facilitation: A manager helps employees discuss concerns and reach an agreement.
Coaching: A manager or HR professional helps employees develop communication and problem-solving skills.
Mediation: An independent third party facilitates a structured conversation to help employees reach a mutually acceptable outcome.
Formal Conflict Management
Formal conflict management involves a formalised workplace investigation and resolution processes either due to the serious nature of the conflict or because someone has requested the matter be handled formally.
Formal processes may be necessary where:
- Informal attempts have failed
- Serious misconduct is alleged
- Bullying, harassment, discrimination, or violence is involved
- There is a significant risk to employee wellbeing or workplace safety
- The employee wishes to make a formal complaint
Formal Conflict Resolution Techniques
Grievance Procedures: Employees lodge a formal complaint that is assessed and managed according to workplace procedures.
Workplace Investigations: An investigation is conducted to determine findings regarding allegations and evidence.
Disciplinary Processes: Formal action may be taken where misconduct or policy breaches are substantiated.
External Resolution: Matters may proceed to bodies such as the Fair Work Commission, anti-discrimination commissions, courts, or tribunals if internal processes do not resolve the issue.
| Process Type | Pros | Cons |
|---|---|---|
| Informal | Faster resolution, lower cost, preserves relationships, encourages open communication | Not suitable for serious allegations, relies on cooperation, outcomes may be less formalised |
| Formal | Provides procedural fairness, creates a documented record, suitable for serious matters, supports compliance obligations | More time-consuming, can increase stress, may impact relationships, requires greater resources |
Step-by-Step Approach to Managing Workplace Conflict
1. Identify the Issue Early: Early intervention is one of the most effective conflict management strategies. Addressing workplace conflict as soon as concerns arise can prevent misunderstandings from escalating into formal grievances, workplace disputes, or employee relations issues. Employers and managers should be alert to warning signs such as communication breakdowns, changes in behaviour, reduced collaboration, increased complaints, absenteeism, or declining performance.
2. Encourage Open Communication: Open and respectful communication is essential for effective workplace conflict management. Providing employees with a safe environment to raise concerns can help clarify misunderstandings, identify the underlying cause of the conflict, and encourage collaborative problem-solving. Active listening and constructive feedback can often prevent minor disagreements from becoming more serious workplace issues.
3. Attempt Informal Resolution Where Appropriate: Many workplace conflicts can be resolved through informal processes before formal intervention becomes necessary. Informal conflict resolution methods, such as direct conversations, manager-facilitated discussions, coaching, or mediation, are often faster, less adversarial, and more effective at preserving positive working relationships.
4. Escalate to Mediation or Facilitation if Needed: If informal discussions do not resolve the issue, mediation or facilitation may be appropriate. These structured conflict management techniques involve an impartial third party helping employees explore concerns, improve communication, and work towards a mutually acceptable outcome. Mediation is particularly effective where workplace relationships have deteriorated but all parties are willing to participate in the resolution process.
5. Implement Formal Processes Where the Matter Is Serious or Remains Unresolved: Formal conflict management processes may be necessary where workplace conflict involves serious allegations, misconduct, bullying, harassment, discrimination, psychosocial hazards, or workplace health and safety concerns. Formal processes may also be appropriate when informal resolution attempts have been unsuccessful. Depending on the circumstances, this may include a formal grievance process, workplace investigation, disciplinary action, or external dispute resolution.
Frequently Asked Questions
Is all workplace conflict negative?
No not all workplace conflict is negative, it will depend on how the parties involved in the conflict handle communication and the cause of the conflict. Constructive conflict can actually be positive for businesses as it encourages employees to consider different perspectives which supports innovation and thinking outside the box. The key is ensuring disagreements remain respectful, professional, and focused on issues rather than individuals.
How can employers prevent workplace conflict?
Employers can reduce conflict by promoting positive culture and having clear policies outlining the behavioural expectations of the workplace. Managers and senior staff should be trained to identify and handle minor conflict appropriately to avoid it developing into a more serious workplace issue.
Can workplace conflict become a psychosocial hazard?
Yes workplace conflict can be a psychosocial hazard when it creates or contributes to psychological harm, stress, anxiety, or other mental health impacts. Although each state operates based on independent Work Health & Safety legislation, all states are aligned on the obligations around managing psychosocial hazards in the workplace. Employers should consider workplace conflict as part of their broader psychosocial risk management and workplace health and safety obligations.
Do You Need Assistance with Managing Workplace Conflict?
Businesses who engage Peninsula have access to unlimited 24/7 support from our expert advisors ready to assist with HR or Health and Safety matters. Our team of experts can provide you with tailored advice and solutions every step of the way. They can walk you through the steps from when you first become aware of a confclict or grievance all the way to the conclusion of an investigation. They also provide documentation to support businesses in communicate with employees throughout these process and guidance notes on running any meetings.
