Conflict, when left unchecked in a small-business organization, has the potential to decrease productivity, trim earnings and damage morale. Effectively managing conflict involves employing formal conflict resolution processes and establishing ground rules for expected employee behavior and performance. Having these measures in place helps employees understand what is expected of them and allows you, as a business owner, to nip potential problems before they get out of hand and negatively impact your business.

Develop Best Practices

Many conflicts arise in the workplace when colleagues dispute the merits of an approach, disagree about delegation of responsibilities, or otherwise clash over the best way to handle a work project or professional situation. Conflict can also arise if there is a perception among co-workers of unequal distribution of the workload, or issues involving employer expectations or chain of command. Clarifying all of these potential areas of conflict in advance can help you avoid problems. This can involve writing detailed job descriptions, helping employees develop detailed personal and group goals and objectives, and making the chain of command clear.

Establish Written Policy

A proactive approach to conflict management can be found in creation of a written policy on conflict management for your small business. Human resources managers and hiring directors should be familiar and well-versed in this process, and the guidelines should be reviewed with new hires, existing employees, and in training and orientation sessions. The guidelines should describe your business's definition of "conflict" and outline the steps employees are required to take to resolve problems and maintain a positive and productive work environment. This might involve documenting an issue, involving an immediate supervisor or filing a formal complaint to be mediated.

Create Open-Door Policy

Many types of conflict can be mediated and resolved in the early stages if employees and managers have effective communication practices in place. Developing an open-door policy invites your employees to approach you with questions, concerns and problems before they get out of hand. Mediating these disputes during the early stages of conflict development can help you clear up misconceptions, clarify expectations, define individual employee roles and responsibilities, and otherwise prevent a full-blown conflict from materializing.

Mediate Conflict In-House

An impartial employee should be made responsible for mediating conflict among staffers. This might be an upper-level manager or a human resources professional. Instruct workers to meet individually with this contact person if problems arise, outline their perception of the situation, then meet with the colleague or colleagues involved for guided dispute mediation and resolution. This approach allows all parties to be heard, yet employs an authority figure to weigh the merits of the dispute and make a binding decision employees will be expected to respect and follow.