The Cost Associated with Workplace Conflict

Elinor Whitmore illustrates the true costs of preventable conflicts in the workplace. Most have interpersonal roots. What are the impacts on productivity, decision-making, and morale?

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The Cost Associated with Workplace Conflict

Below is the transcript of this video link: https://www.youtube.com/watch?v=cMWVBdzUm6I

{Transcript}

[Music] I think most people understand that conflict within an organization can be problematic and costly. What we don’t always understand is exactly how problematic it is, the ways in which it can be problematic, and how costly it can be. I was thinking about this recently because I read an article that stated poorly managed conflict within the workplace—or preventable conflict—may be the single largest reducible cost that an organization has. It went on to say that up to 65% of performance issues relate to conflicts between employees or between an employee and a manager, and not to the employee lacking skills or motivation.

There’s a lot of evidence to suggest that organizational conflict is a significant issue. If we asked most people, they would recognize that conflict creates distractions—people chat about it, it impacts morale, performance, causes stress and health problems, and increases absenteeism. We even see this more often now in claims of bullying or references to a toxic workplace, which demonstrate that people recognize the impact of conflict. Yet, most organizations still don’t try to figure out how the fact that two people aren’t getting along actually impacts the team—their productivity, or how they interact with clients.

I don’t think most organizations take the time to assess how they deal with conflict internally. They might try to resolve a specific issue, but they don’t look at their overall culture or approach to conflict. There are costs of conflict most people wouldn’t even know to include. For example, in my view, conflict can negatively impact decision-making—a cost often overlooked.

Let’s say the heads of two departments have had a lingering conflict. Whether it’s personality-based or about past resource allocation disputes, the lack of resolution may trickle down to the rest of their departments. Will teams interact the way they otherwise would? Will they share information? Will one department head think to give the other a heads-up or collaborate? Will they share data accurately and constructively? Can they innovate or co-create solutions? So, not only does conflict impact morale and productivity, it also affects decision-making. This is all the more reason organizations need to ask: “How are we going to respond to conflict internally?” They must determine how much time and attention they are willing to commit and ensure people have the skills to avoid preventable conflict and resolve issues appropriately. That’s how we minimize the costs of conflict within organizations