To Condemn or To Condone?

"A grievance has been filed against the co-op." These words almost invariably cause an immediate emotional reaction in everyone connected to the co-op. Hardly anyone is untouched by a grievance.

For most people, dealing with a grievance, regardless of one's role, is a distressful and agonizing situation. The employee involved feels personally aggrieved by some personnel decision or circumstance. For managers, it's uncomfortable to have one's judgment questioned and reviewed. For fellow employees, a grievance often polarizes the workplace. And for the board of directors, a grievance often brings an expectation that the board should "fix" a problem. It's almost impossible to be dispassionate about a grievance that involves people with whom one works closely.

Yet grievances are a natural part of any workplace. When people are expected to work together and when their work affects others' jobs and performance, conflicts inevitably develop. The constructive resolution of such conflicts need not debilitate a company, but should serve to clarify policy and employee expectations. Successful resolution of grievances should serve to test the co-op's delegation of authority, should reassure all of those involved that management uses fair practices with employees, and should demonstrate that there is a legitimate forum for employee concerns to be aired.

Above all else, grievances must be handled in a way that is fair, respectful of all involved, and impartial. While the board can provide constructive guidance in the way grievances are to be handled, that should be the extent of board involvement with grievances. In other words, neither individual directors nor the board should be formally involved with handling a grievance. A board should never serve as the arbiter of grievances.

Problems with board involvement

It is unfortunately a common practice among co-ops for boards to serve as the body to whom employees can appeal management decisions when dissatisfied. Nonetheless, experience has shown repeatedly that when boards hear and resolve grievances it creates a "lose/ lose" situation -- both the co-op and the board lose in the end, and sometimes both the employees and management feel they have lost as well. Board involvement with grievances is flawed for five reasons:

#1. Employees deserve better. Boards are not trained to serve as arbitration bodies. In general, very few directors have any experience in personnel or in handling labor problems. Unfortunately, many co-op directors have never served in a supervisory or management position. Directors aren't necessarily skilled as mediators. Personnel actions need to be made in the context of complex labor laws; this is not an area for occasional, novice involvement. When a grievance situation arises, employees deserve to have a procedure that guarantees them a review by a skilled group. Boards are not the best choice to serve as that group.

#2. Boards and directors are not impartial. By serving as a director and being involved in all of the decisions that a board faces (e.g.,hiring and evaluating management, strategic planning, approving budgets and financial projections, setting goals and standards of performance), directors simply cannot be impartial about a grievance. Directors are not outsiders. They are very much involved with the co-op on a regular basis -- they have an established, ongoing working relationship with the co-op's management, and potentially with other involved parties. A grievance merits review by a body that can bring more detachment from a co-op and the people involved than a board will bring.

Of course co-op managers can make mistakes. But if the board adjudicates grievances, how can the manager trust that the board will stand behind him or her when faced with other difficult decisions?

#3. The board will not be perceived to be impartial. Even if your co-op's board could totally neutral about a grievance, someone is bound to feel that the board is biased. If the board sides with the employee and finds against management, management will feel its authority has been undermined and that its credibility has been compromised by its own supervisor. If the board finds against the employee, that employee, and possibly others, can end up feeling that the board is too close to management and unsympathetic to employees' concerns. Regardless of the skills and experience of a board, it's a no-win situation.

#4. Board/management relations are unavoidably compromised by board involvement with grievances. A grievance only arises when a decision has been made by or appealed to the general manager that an employee doesn't agree with. To research the facts of the case, as well as to reach a decision, a board would have to get much more involved with operational procedures, personnel policies, and the details ofthe workplace than is appropriate. Boards must hire managers who have their full and unquestioned support. For a board to then turn around and potentially overrule a personnel decision made by the manager almost always leads to a sense of betrayal by managers. For managers to do their jobs, they need to know that they have the authority to make the decisions needed. Such authority is not truly present in a situation where a board settles grievances. The mutual respect and trust needed for effective board! management relations is hard to establish or maintain in a situation where boards review and pass judgment on individual management decisions.

#5. Resolving grievances is clearly not a board responsibility. A board of directors has a discrete responsibility to act as the members' trustees in making sure that the co-op is soundly managed and to provide overall direction to the co-op. In that context, it's hard to construe that resolution of grievances is a board role. Without a doubt, boards have assumed this function out of good intentions -- out of a desire to try bringing resolution to problems as fairly and inexpensively as possible. While the goals are admirable, this solution is just not the right one.

Some general guidelines

Lately, John Carver's book about boards and governance, called "Boards That Make a Difference" (JosseyBass, 1990), has been getting some attention by co-op boards. Although written for non-profits, it nevertheless offers many useful insights, especially about distinguishing board and management roles. The primary tool that Carver offers is very relevant to considering the board's role in handling grievances.

Carver challenges boards to re-examine their activities and overall role to make sure that they are providing the leadership that their organizations so badly need. To do so, Carver recommends that boards learn to distinguish "ends" decisions from "means" decisions. Ends are the results to be achieved. Ends derive from the values and purpose of an organization and define what the organization does, the impacts or desired outcomes of its activities. In contrast, means relate to the activities and methods by which ends are achieved.

Boards provide leadership best by defining the ends to be accomplished, and not dictating the specific means to achieve those ends. The board's primary concern regarding means is that they are effective -- that the means bring about the intended or desired ends. Boards may define limits to means, that is to provide guidelines (generally what can't be done, what would be unacceptable) that define the boundaries of prudent and permissible action. In this system, the board's major work is to formulate decisions about ends -- making statements about the results to be achieved and the standards of performance expected of management -- which link the co-op with its members/owners, and then with monitoring performance.

In this way, directors can focus on their appropriate and vital task of setting standards of performance and, thereby, providing constructive leadership without getting involved with implementation details or usurping the responsibilities assigued to management. It's a role that is sorely missing in many co-ops, and Carver's system of distinguishing ends from means provides a useful tool to separate board and management responsibilities on a particular issue.

What boards can, should do about grievances

Applying this system to the issue of grievances, we can see a constructive role for the board. The board can define, through a statement or series of statements (names vary: they are called policies, directives, a governance code, or performance standards) the overall results to be achieved (ends) by the co-op's grievance policy. Then it is management's responsibility to craft the specific procedures, prepare needed documents, and set up a system that will achieve the results outlined by the board. Of most importance, though, is that the board not dictate the specific procedures to be followed and not be involved with specific grievance cases.

What would this statement about grievances cover? A sample board code or policy about handling grievance is presented in the sidebar. In general, the board wants to make an overall statement of goals for a grievance system and general guidelines on how grievances should be handled. A board's statement about grievances will probably address management's authority in defining grievance procedures, who must be involved in handling grievances, accountability to the co-op, and overall standards of a grievance procedure. A board statement about grievances should avoid dictating specifics such as where materials should be posted or how much time the committee may spend on a particular case (the means). Instead, if the board focuses on making clear statements of what results it expects, then management can develop a particular procedure to fit those conditions.

In the sample code provided, several such key elements are established. To begin with, the code specifies the goals of the co-op's grievance procedure -- fair and impartial handling, a respectful and professional procedure, an "employee-friendly" system. Further, the code defines a committee structure that involves an outsider with expertise in labor relations, mediation, or human relations, as well as at least one non-management employee. Perhaps most importantly, the board code clarifies that the committee's findings are binding -- that the co-op and its management must follow the recommendations of the Grievance Committee. With this statement, the board has set a clear framework within which management can adapt a specific grievance procedure.

Monitoring the grievance system

The fact that employees file grievances does not necessarily indicate problems or failure on the part of management. It merely indicates that people are involved who see things differently. Directors will want to make sure that this philosophy is reflected in their guidance to management, and in their consideration of management performance. And yet, having numerous grievances filed year after year about the same issue could indicate a failure in the way grievances are handled or in follow-up to grievance cases.

When boards focus on the results they want to have accomplished, they can then monitor implementation to determine whether those results are achieved. An annual report by the Grievance Committee to the board, like the management letter co-ops get from their auditing firm, can provide an outside review of the way management has handled grievances -- without getting involved in the merits or particular findings of specific cases.

Imagine that you are the co-op's general manager and are faced with the uncomfortable and difficult situation of having to fire an employee. That employee then decides to file a grievance, per the co-op's policies, with the board of directors. After taking testimony from the grievant, the board decides that the employee should be reinstated with back pay. Imagine how this situation would make you feel as the manager.

Of course co-op managers can make mistakes. But if such a decision is to be reversed, who would you as manager prefer to hear such a recommendation from -- the board or a more impartial group? If the board adjudicates grievances, how can the manager trust that the board will stand behind him or her when faced with other difficult decisions? As manager, would you be willing to accept this decision by the board if it also happened that the employee involved was a good friend of a vocal and critical board member? Wouldn't it be better for board members never to get involved in this situation? Wouldn't you, as manager, find it easier to accept and acknowledge that you made a mistake if a more impartial group handled the grievance process and issued the recommendation?

Boards should refrain from any involvement in handling grievances or in formulating the details of grievance procedures. Instead, if boards focus on making constructive, goal-oriented statements about how grievances are to be resolved, they will provide guidance to management without usurping responsibility for implementation. As a consequence, boards also end up with a much better basis for evaluating management performance.

It's almost impossible to bring an unbiased and neutral review to a grievance that involves people with whom one works closely --just as true for boards as it is for any other party. When boards focus on providing overall guidance through statements of results to be achieved, they provide constructive leadership and help their co-ops be the kind of exemplary, responsible, and responsive employers they should be.

SAMPLE BOARD CODE OR PERFORMANCE STANDARD:

Resolving and Handling Employee Grievances

The Board of Directors recognizes that its responsibility is to define overall standards and results to be achieved for a grievance procedure. The General Manager has full authority to define and implement specific procedures consistent with these guidelines. This statement directs the General Managerto achieve certain results and limits the General Managers authority to actions that are within acceptable bounda~es of prudence and ethics.

1. The General Manager shall establish a grievance procedure that ensures fair, impartial and timely handling of alt employee grievances. The grievance procedure shall ensure that all parties are treated respectfully and professionally. The grievance resolution process shall also address ways to prevent the same type of problem from recurring, if possible.

2. The co-op's grievance procedure shall ensure that all employees are informed about the steps to take in pursuing a grievance and that forms and explanatory matenals are readily accessible to employees at all times. One employee (not the General Manager) shall be designated to counsel employees about grievances -- to help them determine if they have grounds for a grievance, fill out forms, and explain the steps to follow.

3. Grievances by co-op employees shall be reviewed by a Grievance Committee that is chaired by someone not employed by the co-op and not involved with the co-op in any way. The Grievance Committee chair shall be selected for his/her experience and expertise in labor relations, mediation, or human resources. The committee chair shall be formally appointed by the board, based on research and a recommendation by management, and shall serve in this position for a one year term. The Gnevance Committee shall also include at least one non-management employee.

4. The findings of the Grievance Committee shall be binding on the co-op and its management. The Grievance Committee shall issue its findings as promptly as possible so that issues do not remain unresolved for long periods of time. The General Manager shall cooperate with the committee and implement its findings in a timely manner.

5. The Grievance Committee shall issue an annual report to the board regarding its activities and general findings. The committee's report shall focus on the quality of cooperation it received from management and management compliance with its findings.

6. The co-op's grievance procedure shall be cost effective. The committee shall be issued an annual budget for its work.

Grievances: "Worker Friendly" Comments

To the editor:

I read with interest the pair of articles in your Nov.-Dec. issue concerning grievances. This is an obviously important area. A lack of care or attentiveness can have hard feelings as a result and a process that then is underutilized because of a poor precedent. I could not agree more with the comments limiting the boards role in grievances. I have seen a grievance misused by a board to further personal attacks against management.

The two articles taken together present a picture of a managerial perspective of the grievance process. The intent appears one of creating a fair system, and the readers of this publication are probably primarily management and board members. I would like, nonetheless, to add a few comments that are more "worker friendly."

"Grievance procedures generally provide for at least one level of appeal.., of an adverse outcome."

If an organization is contemplating drafting or revising a grievance procedure, it makes good sense to have an employee not in management involved. Including someone with union experience, even if an outside person, is highly desirable. This is important for a couple of reasons. Folks who come to find themselves involved in managing a natural foods store or co-op are likely not to have experience with contract language or indeed grievances. Even a well-meaning manager is likely to create a document that contains unintentional bias toward management. Further, some level of involvement or representation ofthe employees' concerns is more apt to result in something with credibility or even ownership among those who may need to use the grievance process.

I would like to add a few words about the procedure offered in the article. Unlike the Carolee Colter piece, grievance procedures generally provide for at least one level of appeal by the grievant of an adverse outcome. Larger organizations often have many steps. This builds in assurances to the worker. Given that the complaint is reasonably valid, one's chances are simply better in a process where success can be realized any step along the way. The grievance committee as constructed in Colter's article has essentially an arbitrator as the swing vote. Rather than bringing in a trained professional at this step, this individual and the possible concomitant expense could be a saved as a final petition. In other words this part is broken into two steps: a committee with a third dispassionate member (possibly from a compiled list of recruited outside volunteers) and, if necessary, a final binding arbitration with a person or persons appropriately chosen.

At the other end many grievance procedures involve an informal meeting as a beginning stage. This is different from the article in one respect: by mandating this as part of the process, it puts management on notice as to the seriousness or earnestness of purpose. Many grievances are solved at this step. In addition, the grievant has more control over the direction ofthe process; it is their right to have the complaint heard before a committee if unhappy with the outcome of a meeting with management. By contrast, in the proposed procedure in the article, a general manager can "pocket veto" a grievance by choosing not to respond to the employee. In summary, the above suggests an outline of a three-step procedure: an informal meeting, hearing before and determination by a committee, and a final appeal to arbitration. The choice to move to each step belongs to the employee. If there are serious costs associated with the last step, the expense of a frivolous appeal can be partly or fully assessed against the grievant.

I suppose the shape of a given grievance method will reflect perceived needs or philosophy. If this is developed more out of a sense of compliance or as a buffer against lawsuits, then a perfunctory, even unfair text will result. On the other hand if an organization is seeking an approach that includes redress with some leveling of the playing field, seek out relevant models. At the very least, try to find grievance contract language negotiated in collective bargaining agreements. These can be quite instructive.

Gary Nolan
Monroe, OR

P.S. Even though I am a management puke now, I was active in a union and have received training on both ends: both management and union.

See other articles from this issue: #055 November - December - 1994