Arbitration is hearing both sides of an argument and then deciding between them. It is a useful way to manage disputes in the organisation because by exercising authority in this way, the manager contains the conflict.
Managers are more like referees
A couple of colleagues who cannot agree may ask co-workers to help them resolve the conflict. But it is different when a manager acts as an arbiter — managers are more like referees. When managers arbitrate:
- they do not have to be invited, they have official power and authority to intervene,
- they do not have to reach a solution that either or both of the parties agree to, and
- their decision is binding.
Arbitration is acting as an authority figure. Although it is not essential that both parties are happy with your decision, arbitration is most successful when the disputing parties are happy with, and accepting of, your imposed decision. That way, not only is your decision more likely to be carried out by them, but it also will have a more positive influence on your future arbitrations.
The characteristics of arbitration
So you need to make sure that the arbitration has certain characteristics:
Working with both sides — this does not mean that the disputants necessarily actively participate in the decision you reach, but they should feel that they have been engaged with the process. This must apply equally to both sides, and each party must feel that he had a chance to voice his concerns.
Making justifiable decisions — the decision you reach must be based on justifiable facts and reasons, not on arbitrary opinions and feelings. Then even people who disagree with you will be able to see the legitimacy of your reasoning.
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