Handling Employee Complaints

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How you handle employee complaints is central to how your business is viewed by employees and ultimately the public, which hears about how you treat them. Creating a positive way to encourage and deal with complaints is a sign to your employees that you care about them and that they are appreciated. Again, the idea is simple. If employees truly feel that their concerns are taken seriously, they will walk an extra mile (or maybe even ten) for your business because they will regard it as their business too.

Perhaps the best example of the value of a procedure for handling employee complaints is a company with one of the worst records: the United States Postal Service (USPS), a semi-private organization that was partially separated from the U.S. government in the late 1960s. Because the USPS was originally a government bureaucracy it retained a rigid structure that was inappropriate for the type of employee relations that prevails in the commercial market. The consequence became evident in the late 1980s and well into the 1990s when several USPS employees killed their supervisors and other employees in the workplace. The American public became greatly alarmed as the horrors of workplace homicide spread to other industries. During this time the phrase "going postal" was commonly used to mean workplace homicide. TV comedians suggested that when a flag flew at half mast over a Post Office this was a sign that it was hiring new personnel.

All of this changed when the USPS introduced employee mediation services in the late 1990s. Throughout the United States, in hundreds of cases per week, postal employees are offered free mediation services, with paid time off to mediate all disputes and disagreements with managers, supervisors and fellow employees. The consequences have been very positive and as the success becomes recognized, similar commercial enterprises have copied the Postal Service.

In most small businesses, there is an informal complaint structure. An employee who doesn't like something tells the boss or a supervisor face-to-face. This process is generally workable as long as the problems are minor and the business small. However, when a business employs more than five or six people, a formal process, including personnel reviews, makes it easier to deal with a wide array of problems that are not so minor.

Even in very small businesses, a formal employee grievance process should be written, posted and given to each employee to sign. The grievance procedure should specify where and how to complain about all types of potential problems. It should discuss in detail how the complaint will be investigated and, if necessary, be formally considered and resolved.

Finally, a tight procedure to keep complaints confidential is obviously a crucial part of any formal complaint procedure. In the best circumstances, an employee complaint process should also include an appeals process for serious matters where management's judgment may warrant a second opinion.

If you don't have a good grievance procedure, an employee who feels there is no internal structure to deal with a problem about termination, demotion or salary may seek help outside the business. This can often mean either that employees will sue you, or try to organize a union. For example, we know a small wholesale business which recently—unilaterally and without consultation—changed a series of employee rights and benefits. In the view of management, the benefits conferred on the employees by the change were much greater than what the employees lost in perks. So when the employees turned to the Teamsters Union, management was initially both flabbergasted and angry. It never occurred to them that the employees, suddenly facing a whole new set of work rules, some of which they thought were very unfair (for example, loss of pay for lunch hour), went outside the company for help because there was no fair grievance and appeal procedure or, for that matter, any process that allowed them to communicate their position to management.

Sample Employee Grievance Procedure

Here is material excerpted from the formal grievance procedure of a 20-person software development company. It isn't a complete grievance plan, but illustrates some of the issues that should be covered.

Grievances concerning personnel reviews: The person with a grievance is to write a letter to the chair of the grievance committee requesting a hearing time and date. The chair will hear the matter, put comments in writing for the employee personnel file and take whatever actions are necessary in the matter. No further appeals are provided. If the chair of the grievance committee is a direct supervisor of a party involved, the latter shall be sent to a company lawyer who is the alternative chairperson.

Grievance concerning salary, benefits or office working conditions: Same as above except that the grievance committee chair shall include in the deliberations the com pany president and another employee chosen by the person filing the grievance. There is no appeal for final decisions of this group.

Grievances concerning ethical behavior of employees or management concerning termination of employment, matters of illegality, public issues, discrimination: The procedures shall be the same as above, except that the full grievance committee shall be called. The person filing the grievance letter can specify individuals to be excluded from the committee where their presence would directly bear on the grievance matter. Appeal on the decision of the committee can be filed with the Chairperson of the Board, within two weeks of the final decision of the grievance committee, and the Board shall as a whole make a final decision at its earliest convenience.

All personnel involved in the grievance process are expected to maintain confidentiality when requested.

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