Employee Grievance Systems

Grievance systems are formal organizational procedures designed to address employee complaints. These employee complaints, hereafter referred to as grievances, can range from general disputes about organizational policies (e.g., disputes about interpreting the vacation policy), to specific disputes about how the employee was treated (e.g., conflict with coworkers), to disputes that have legal implications (e.g., racial discrimination).

Grievance systems vary by organization. However, grievance systems typically have several (four to five) hierarchical steps that are used to address conflicts in the organization. Often the lowest level or step of a grievance system in a nonunionized organization is a written complaint or informal discussion with the employee’s immediate supervisor. The first step in a unionized organization usually requires employees to talk or file a complaint with the union steward (representative). Higher steps of a grievance system usually consist of the employee presenting his or her complaint to higher levels of management. In a unionized context, the employee would receive union assistance or representation in presenting the complaint to the higher levels. The final step of grievance systems may consist of presenting the complaint to the highest level of administration (e.g., the CEO), a peer review panel (similar to a jury of peers), or an arbitrator (a neutral person who makes a final decision, similar to a judge).

Another common characteristic of grievance systems is that they are appeal procedures. This means that employees make the initial grievance at the lowest level and an initial decision is made. If the employee is not satisfied with the decision, he or she can appeal the decision to increasingly higher levels until satisfied with the decision or until all the steps have been exhausted. Because of these characteristics, grievance systems are also referred to as multilevel appeal systems.

Why do organizations have grievance systems?

The earliest grievance systems were created because of unionization. Specifically, they were created to handle conflicts related to interpreting or implementing the collective bargaining agreement (a type of contract) that had been negotiated between the union and management. Unions promoted grievance systems as a voice mechanism or as a way to address employee concerns without risking retaliation from management and were considered a key feature for motivating employees to form a union.

Today, organizations voluntarily implement grievance systems in nonunion and union organizations for a variety of reasons. First, some research indicates that grievance systems may serve to reduce costs. For example, they may help identify and resolve organizational problems that could, if not properly addressed, lead to costly outcomes such as employee turnover. They are also considered an inexpensive alternative to litigation and may mitigate an employer’s legal liability. Second, organizations may implement grievance systems to enhance the likelihood of increasing the positive outcomes (such as higher employee commitment to the organization) associated with employees feeling fairly treated and conflict being handled effectively. Finally, there is considerable evidence that organizations voluntarily implement grievance systems to reduce the likelihood of successful unionization of their employees.

Theoretical Roots of Grievance System Research

Two main theoretical models have been used to examine grievance systems. The first approach, the exit-voice model, was introduced by a labor economist, Albert Hirschman, to explain consumer behavior but was later applied to the employment context. According to the model, an organization learns about workplace problems via two major methods: exit or voice. The exit method is when employees leave the organization, and the voice method is when employees complain about the problem directly to the organization (e.g., grievance filing). The voice method is considered better for the organization, because organizations can learn about the problem directly and more quickly. This model predicts that more loyal employees will use voice methods to communicate workplace complaints and voice (e.g., grievance system activity) will be associated with positive outcomes for the organization.

The second theoretical approach draws from the due process and procedural justice literature. In the grievance system context, this theoretical approach focuses on elements of the grievance system as they relate to the perceived fairness of the system. According to this theoretical approach, the perceived fairness of the system will be associated with higher grievance system usage.

Predictors of Grievance Filing

There are a number of ways in which an employee can address a complaint about a workplace issue besides filing a grievance. An employee could try to resolve the complaint on his or her own by discussing it informally with the other party, or the employee could use some alternate dispute resolution services provided by the employer, such as using the assistance of an ombudsperson or mediator. An individual could also pursue litigation through the courts system or choose not to address the complaint at all. This range of possibilities for addressing complaints has led several scientists to examine factors that relate to the use of grievance systems.

There are considerable differences across industries and organizations in the extent to which grievance systems are actually used. The earliest research examined the relation between demographic characteristics (e.g., sex, race, age) and grievance filing (using the grievance system). The findings were generally weak and inconsistent. That is, there is no strong support for the idea that one demographic group (e.g., younger workers) is more likely to file grievances than another group (e.g., older workers).

Today, scientists focus on how characteristics of the grievance system relate to grievance system usage. Most of this research draws from relevant due process and procedural justice theory. The empirical findings are largely supportive of this theoretical approach. For example, employees are more likely to use grievance systems that are considered more credible and have decision makers who are perceived to be fair and neutral. Another important factor is whether employees perceive there to be a low likelihood of punishment (being retaliated against) for grievance filing. Grievance systems that allow grievance filers to have an advocate assist them with the process are associated with higher grievance rates. This helps to explain why union grievance systems are used more frequently than nonunion grievance systems.

Some research focuses on how the characteristics of the organization and economy relate to grievance activity. Theoretical arguments suggest that the culture and norms within the organization for expressing disparate views is related to grievance filing. Also, empirical evidence demonstrates that organizations that offer a number of different dispute resolution alternatives have lower grievance-filing rates. High unemployment rates are associated with higher grievance activity, suggesting that higher barriers to leaving the organization are important factors.

Grievance System Outcomes

Most grievance system research focuses on examining the outcomes of grievance systems. Grievance system outcomes can be measured at both the organizational and individual levels. However, not all scientists agree on how to measure or interpret the measures of grievance system outcomes. The multiple approaches will be described in the following paragraphs.

Organizational Outcomes

One stream of research has applied the exit-voice model to examine the relation between having an organizational grievance system and outcomes such as lower employee turnover. Substantial research indicates that organizations that have grievance systems in place do have significantly lower turnover rates. We do not have any direct research evidence that implementing a grievance system is associated with higher employee productivity. Overall, this research is generally supportive of the predictions drawn from the exit-voice model—that is, the use of the exit option (turnover) can be reduced by providing a voice option.

Another stream of research has specifically examined grievance activity (the extent to which a grievance system is used) and organizational outcomes. Scientists in this stream of research argue that it is more important to consider whether the voice option is actually used than whether it exists. The empirical research suggests that higher grievance system usage is associated with more negative outcomes, such as lower pro-ductivity. It is difficult to determine whether the lower productivity results from grievance activity or if both grievance filing and lower productivity result from another, underlying problem, such as employees feeling low commitment to the organization.

Individual Outcomes

Also relevant is the effect of grievance systems on the individual employee. A number of studies compare the personnel records of grievance filers to those of nonfilers. The general conclusion from this research is that individuals who file grievances experience negative outcomes. Specifically, grievance filers have significantly lower performance ratings, lower promotion rates, higher absences, and higher turnover rates than do nonfilers. In addition, grievance filers who appeal initial decisions and progress through higher levels of the grievance system appear to experience more negative outcomes. Based on these findings, scientists have concluded that, contrary to predictions from the exit-voice model, employees who exercise voice via a grievance system are punished for doing so. Specifically, scientists suggest that employee grievance filing is considered offensive or deviant behavior and managers punish that behavior consciously or unconsciously with lower performance ratings and limited opportunities for promotion.

However, other scientists argue that individual outcomes of grievance activity should be measured differently. In particular, these scientists argue that the negative outcomes attributed to grievance filing may actually result from experiencing a workplace dispute, rather than attempting to resolve it via a grievance system. In this approach, the individual outcomes of grievance filers are compared with individual outcomes of employees who had a complaint but chose not to file a grievance. Research in this area is limited, but there is some evidence that the individual outcomes of grievance filers are very similar to the individual outcomes of nonfilers who had a basis for a grievance but chose not to file one. Thus, it may be the reason for the complaint itself, rather than filing a grievance, that is the root of the negative outcomes.

Summary

When an employee experiences a dispute, he or she may choose to make a complaint through an organization’s grievance system, if one is available. Employees are more likely to use a grievance system to file a complaint if the grievance system is perceived as fair. Organizations that employ grievance systems appear to experience positive outcomes such as reduced turnover, yet the individuals who use the grievance systems may suffer negative consequences for doing so.

References:

  1. Boswell, W. R., & Olson-Buchanan, J. B. (2004). Experiencing mistreatment at work: The role of grievance-filing, nature of mistreatment, and employee withdrawal. Academy of Management Journal, 47, 129-139.
  2. Freeman, R. B., & Medoff, J. L. (1984). What do unions do? New York: Basic Books.
  3. Hirschman, A. O. (1970). Exit, voice, and loyalty. Cambridge, MA: Harvard University Press.
  4. Ichniowski, C. (1986). The effects of grievance activity on productivity. Industrial and Labor Relations Review, 40, 75-89.
  5. Lewin, D., & Peterson, R. B. (1988). The modern grievance procedure in the United States: A theoretical and empirical analysis. Westport, CT: Quorum.
  6. Lewin, D., & Peterson, R. B. (1999). Behavioral outcomes of grievance activity. Industrial Relations, 38, 554-576.
  7. Olson-Buchanan, J. B., & Boswell, W. R. (in press). Organizational dispute resolution systems. In C. K. W. De Dreu & M. J. Gelfand (Eds.), The psychology of conflict and conflict management in organizations. SIOP Frontiers Series. Mahwah, NJ: Lawrence Erlbaum.

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