01.30.08
What is Conflict Costing You/ Your Company Part IV
The third reducible cost is loss of skilled employees. Organizations invest in employees’ skills by paying a premium salary upon hiring and by providing training thereafter. Exit interviews, which ascertain reasons for terminations, reveal that chronic unresolved conflict is a decisive factor in one leaving a job in at least 50% of all voluntary departures; and chronic unresolved conflict accounts for up to 90% of all involuntary departures (except due to downsizing). Replacing an employee costs 150% of his/her total annual compensation. So referring to our earlier example with Wanda, Fred, and Charlie, if Fred decides to leave the cost or replacing him would be $40,000 X 150% = $60,000; since it would be voluntary use 50% or $30,000 that could be attributed to conflict.
… more reducible cost factors in Part V
What is Conflict Costing You/ Your Company Part III
Continuing from Part II, the second reducible cost is reduced decision quality.When a decision is being made under conditions of conflict, these decisions are always inferior to decisions made when cooperation prevails. Even if someone is not in a position that is deemed “decision maker” there can still be a cost to minimal decisions. For example, let’s say that a secretary decides to put all calls through to voice mail since he/she doesn’t want to talk with their supervisor – thus the supervisor misses an important call that can cost the company a huge sale. Good decisions must be based on an optimum quantity and quality of objective information. If conflict is present between people who share decision-making authority the resulting decisions are likely to be contaminated. A realistic figure for cost in this arena could be very low to exceedingly high depending on the decisions… let’s not put a dollar value here. We’ll just say that the cost could run from low to high.
…more reducible cost factors in Part IV
01.28.08
What is Conflict Costing You/ Your Company? Series, part I
What is the cost that conflict is causing your industry, your company, your team? You might be amazed at the amount of money that is being thrown away by ignoring or down-playing conflict that is occurring in the office. “Conflict is the least recognized cost and the largest reducible cost to an organization.” (Managing Differences.Daniel Dana, Ph.D. copyright 2006). This series is going to take you through 8 different ways conflict is a cost to an organization. Before reviewing the next few sections, think of a conflict that is occurring in your organization, it can be between two people or between groups of people, etc. The more individuals involved the higher the cost. Also take into account, those that are observing or effected by the conflict that is around them; this is an additional cost as well. (Much of the information provided is research from Daniel Dana Ph.D.)
….. to be continued in part 2
