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Basic Conflict Resolution Skills: Employee / Independent Contractor Conflict

Employee-Independent Contractor Conflict

Basic Conflict Resolution Skills: Employee / Independent Contractor Conflict

What You May Be Feeling

If you are an employer and have employees, virtual assistants, or independent contract workers, perhaps you are having a conflict with them where you feel anxiety, fear, anger, frustration or other negative feelings.

Through my mediation work, I have seen first-hand how tremendous friction between employer and employee can consequently strain a business. This survey article aims to provide some quick tools and strategies to manage the conflict you may be experiencing with your employees.

What is Employee Conflict?

Employee conflict is conflict between an employer and an employee, virtual assistant, or independent contract worker.

Essentially, the conflict often arises from a failure to deliver. It can emerge as frequent arguments, missed deadlines, inadequate work product, not following directions, lack of follow-through, creative differences, or low productivity.

What Causes Employee Conflict?

Multiple factors can create employee conflict. But the inherent power differential between an employer and employee is perhaps the greatest source of pre-existing conflict that is created the instant an employee-employer relationship is created.

Several other common factors can contribute to employee conflict.

Different communication styles, low self-esteem on the part of either or both employee and employer (which can manifest as insecurity), and isolation are common sources of employee conflict. A mismatch between employee and employer in terms of values and personal issues can also occur.

For instance, during the job interview process in the United States one is generally not permitted by law to ask a potential employee about more personal matters such as their marital status (U.S. Equal Opportunity Commission, 2013). The purpose of the law is to prevent prejudice in hiring, and employers must follow the law. However, everyone has real and various personal issues that will very likely affect their functioning and work product.

For instance, on the surface, a prospective employee candidate may seem completely suited and highly competent to do the work. However, beneath the surface this prospective employee could be trying to juggle a divorce, or a  criminal matter related to enforcing a restraining order in a domestic violence matter, or may be trying to raise children alone.

These are not insignificant factors to the employee. First, these circumstances are significant for the candidate personally, and, humanly. Second, the candidate could suffer from scattered energy and focus, thereby affecting the business. After following the law, there are strategies to help such dedicated candidates succeed and thrive as part of the team.

Does this mean employers should avoid hiring people with conflict? No. In fact, many employees who have successfully managed enormous conflict may be better employees given their family commitments and life experiences, which may better prepare them for the work to be accomplished.

Because the law is trying to effect greater equality and opportunity by discouraging discrimination, it requires a greater responsibility on the employer to learn how to work with people who are experiencing a greater-than-average amount of conflict in their lives.

Learning how to work with and support such challenging employees is an opportunity to grow exponentially and become a more effective, human, and respected leader. You may find that the experience can actually make you a better person. Some business owners might say, “it’s weak to spend time on ‘soft factors’; I don’t want to be a better person, I just want to make better money”.

However, businesses that put people first have proven to be profitable. For instance, Zappos’ CEO and founder Hsieh’s business rose from obscurity to eventually become one of the most successful shoe retailers on the internet.. Hsieh encourages self-expression by his employees, giving them not only a sense of belonging but also a sense of personal freedom. This has likely contributed to Zappos’ strong work ethic culture, that appears to have boosted the bottom line.

Other companies are revealing anecdotal evidence of success with giving employees more say in their work life. For instance, the CEO of 1SaleADay.com found that giving his employees the power to vote on either free lunches or lower health care premiums and converting their office walls into chalkboards resulted in higher productivity and creativity.

Other benefits he found were higher retention, increased trust, and happier employees (Fisher, 2013). Balancing legal decisions of hiring, promotion, bonuses and firing with supporting broader decision-making choices by employees is complex, but if the right balance is struck, evidence from some businesses reveals that it can be a true win-win.

Some employers may say, “well, I’d rather just avoid these conflict-prone type of candidates altogether, and hire a young employee who doesn’t have all that baggage”; or “I’d rather just avoid hiring young employees because of their apathy”. When the population supplies ample opportunities for such hiring practices, it can be tempting to avoid conflict because it is perceived as easy. However, eventually, even star employees will grow and potentially add perceived “baggage” to their lives.

One of the flaws with the “chew up and spit out” business model is that it essentially flees from the problem by opting for short-term, short-sighted, solutions that can leave a business vulnerable in the long run by backing itself into a corner.

Why? In part, over time, the business cultivates a public relations and loyalty problem—if the business model is seen as this type of “user and abuser” business, employees will only perceive the company as a place where they can get a paycheck and not leverage their inherent talents and skills to truly help take the business to the next level. Aside from recruitment and retention costs, this type of business model spooks top performers who can be reasonable in their demands and who are seeking fair pay and fair conditions.

These practices with employees can consequently develop a public relations issue with the customer. How a company treats its employees can be revealing and possibly off-putting to current and prospective customers. Most customers want to feel good about the businesses that they support financially.

A business can risk looking disingenuous to customers if they neglect to treat their own people with respect. This in turn can cloud trust in the customer’s mind because observing a company’s lack of honesty with their employees could raise questions about honesty with customers.

Ever try rooting for an opposing team? It can feel a lot like that to employees who do not believe in, and are not enthusiastic about, the company’s mission. Strategic thinking in terms of the long term is critical for the future success of a business. Businesses that are interested in staying in business for the long-term often have to balance prudent financial choices and resist the ‘quick and easy fixes’ such as putting a fresh new body in the seat. Think about where you want your company to go.

Eventually, population fluctuations make the ‘chew up and spit out’ model unsustainable. And the costs of hiring people have been shown to outpace picking candidates who can grow and contribute to the company over a longer period of time (Boushey et al., 2012).

I have observed that companies that pick candidates with values most aligned with the company and with enthusiasm about the mission seem to benefit the most. This also tends to result in much happier employees. These candidates have staying power and can help grow the company.

Other factors can create or contribute to employee conflict. A mismatch between the company’s and the employee’s values can be an issue. Personal issues at home can be a particularly prodigious source of problems. Different management and work styles can clash.

Further, different personality types can often run into conflict with differing types. Because most businesses require the talents and skills of vastly different personalities to get things done, collecting the group together will result in inevitable conflicts.

Also, differences in age, educational level, socio-economic status, race, gender, disability, place of origin, sexual orientation, and veteran status are all factors that can complicate the workplace. But the good news is that these vastly different personalities, life experiences, and values have the capacity to strengthen your company.

There is a vast power of human potential in the U.S. that is derived, in part, from its diversity. Communities and businesses that leverage diversity are more likely to survive and thrive. Why? Because the world, and particularly the U.S., is becoming less homogenized. In some cities, no one particular group can claim to be a ‘minority’ (See 2010 Census).

Diversity can reduce risk for a business because a diverse workforce provides a direct representation of who your product or service serves, or could serve in the future. But a diverse group that lacks conflict resolution skills can quickly devolve into conflict and dysfunction.

The key is not to avoid conflict but head straight into it as soon as conflict appears. If negotiations and conflict resolution skills are not employed early and with intention, problems can often spiral out of control to a situation where a $600 per hour (or more) attorney becomes involved. In many cases, an attorney has a strong financial incentive to drag the matter out and antagonize the other side. You can mitigate risk by leveraging conflict resolution skills.

Why is Employee Conflict Bad?

Employee conflict is bad because, quite simply, it harms the bottom line. It harms morale, scares away investors and banks, and very importantly, can turn off customers. Customers build the bottom line.

Brand experts have observed that today, with the proliferation of the internet and social media, any business with a brand does not really own it anymore because anyone can comment on it now with Twitter, Facebook, and dozens of other social media tools (Adamson, 2009).

According to a study of the most-relevant research papers on employee turnover costs conducted by the Center for American Progress, a non-partisan educational institute, it costs a business, on average, “one-fifth of a worker’s salary to replace that worker” (Boushey, et al. 2012).

Hiding problems about conflict in your business, such as a discrimination issue, does not solve it. This is true particularly if it goes to court where the conflict becomes a matter of public record. The world is becoming too connected, and consequently too small, and a far more effective strategy than avoiding conflict is to leverage radical transparency, particularly internally, and deal with conflicts head on before they become public relations nightmares.

If customers do not trust a business, they will likely stop giving their money to it. Even if the resource they need, such as food, is scarce, they will soon divert their resources to an alternative and even one that is less convenient.

The rise in farmer’s markets is illustrative. While very few of these markets operated only 15 years ago, they now bring in billions in domestic revenue, and have seriously undercut mainstream organic grocery chains. This change is certainly not due to convenience. You can’t just drive to the local farmer’s market any time you please; the customer has to bend to the farmer’s market schedule.

Finally, toxic employee conflict is particularly harmful to your business because it can destroy relationships, both personal and professional, and can directly harm your health. Generally, business is built on relationships and if you can cultivate open and healthy communication, you can give your business a better chance of succeeding.

Why Do 70% of People Hate Their Job?

A recent Gallup Poll revealed that a staggering 70% of people “hate” their jobs or are completely disengaged (Stebner, 2013). Not even perks such as free lunches and nap rooms make a difference. Poor management is cited as one of the leading causes for employee disengagement, leading to “$450 billion to $550 billion per annum of lost productivity, stolen goods, and missed days of work” (Stebner, 2013). Employee feelings of dissatisfaction, anger, and boredom were the most commonly reported emotions. These are serious numbers and emotional responses.

Most likely, the perception of poor management as the root of the malcontent can be traced back to the inherent and unavoidable power differential of employers and employees. Essentially, it creates a disempowering relationship characterized by fear and anger.

A lack of self-determination and control make people miserable. Most people do not like being controlled by other people. Through countless stories of humanity spanning the ages, human beings have yearned to be free. One need look no further than the U.S. Declaration of Independence for an excellent expression of this desire for freedom.

Stanford neurobiologist Robert Sapolsky studies stress and how our social standing in various hierarchies can affect our susceptibility to stress-induced health effects. In research spanning three decades, Sapolsky has found that subordinate primates in the wild who are positioned lower in the group hierarchy, have elevated levels of stress hormone in their blood compared to “alphas” (Sapolsky, 2004 and National Geographic, 2008).

Perhaps most revealing from his research was an incident where a troop of baboons was nearly decimated, and a new social order emerged amongst survivors. The story goes as follows: the troop came upon a holiday resort’s trash that happened to be infected with tuberculosis.

The alpha baboons, who typically win the choice food and mates because of their size and aggression, soon died because they had the highest exposure to the tainted meat. The “nice guys” in the group who had not fought as successfully to eat the meat were spared, and were available to perpetuate the troop.

What soon emerged was a much more harmonious troop with correspondingly lower levels of stress hormones. When “alpha-like” adolescents tried to enter the group, their “alpha” behavior was discouraged by existing troop members. The new adolescents had to adapt to the socially acceptable, more peaceable hierarchy.

The troop dedicated less time to fighting and more time to cooperation (grooming) and consequently developed a physically healthier troop.

Sapolsky’s research suggests that amongst primates, power differentials induce great stress that in turn can trigger enormous health problems. These observations also suggest that oppressive hierarchical systems are learned behavior that can be changed.

As humans, we have the power of choice and the ability to dramatically and quickly alter the cooperation of our groups by giving the members of a group control and power over their destiny.

Sapolsky also observed that thinking you are a subordinate and not having control is just as damaging as being a subordinate and not having control. Thus, if you are a manager and you believe that you do not have control and power, you will not experience the positive effects of the control and power that you actually hold.

If your status is lower on the hierarchy, you can feel that you have control in some other dominion of your life. For instance, being coach of the soccer team after work could help you to cope with hierarchies that are perceived as controlling.

Compound the innate need to be free with poor communication/conflict resolution skills, and it is no small miracle that we are able to produce or affect anything. People often work for money because they need to survive, put food on the table, and keep a roof over their head. And managers need to be able to give their employees or independent contractors a degree of guidance to float the business.

Yet human potential is so much greater than survival. As an employer, you have the opportunity to increase your fortune. But you also carry a tremendous responsibility when you decide take on employees. It costs more and it carries more risk, but the rewards can be so much greater. If you can leverage that opportunity to the best of your ability, not only do you stand to gain from it, but so do those who come along with you.

These concepts put the adage “power is never given away, it is taken” on its head, though this expression appears to validate primate behavior. But, as humans, we are not fated to act as unthinking beings, responsive to instinct alone; we are creatures of choice.

We can select a more evolved choice in altering power dynamics consciously.

Given what we know about power dynamics, there may be innovative ways to address this conundrum of power so that everyone can benefit. Towards the end of this article are some concrete actions, highly innovative approaches, and effective strategies that may be helpful in resolving and managing employee conflict. Some of these concepts may be too uncomfortable for you to use directly at this time, but they are worth exploring.

NOTE: after reviewing these ideas and consulting with legal self-help (see resources), check with an attorney/CPA to ensure that you are within the IRS tax identification laws for employees/independent contractors; the penalties can be severe for mis-classifying an employee versus an independent contractor.

The Conflict Between Controlling Employee Salaries & Raises

Many businesses seek affordable labor just to stay in business and boost the bottom line. Employee costs are perhaps the most expensive piece of running a business. The hiring of virtual assistants is not without controversy, and there are very strong pros and cons. Many American entrepreneurs may not even be able to contemplate self-employment without tapping this emerging human resource. However, there are some serious long-term consequences related to employee salaries. Conflict resolution skills can help pave the way to a win-win.

There is conflict when people feel exploited. The power differentials between employee and employer are inherent and deep. Some employers hire ‘just good enough’ employees to keep the business floating but never promote, or give raises, from within to keep labor costs low.

This could explain why the top complaint of employees is that managers (who are primarily interested in not getting fired) ignore their talents and do not promote employee growth. Or else, the employees will just get “too expensive”. It can even lead to building a case to the board and shareholders to ‘ship off’ such ‘just good enough’ positions elsewhere, thereby lowering costs further, and boosting profits. For example, American manufacturers have recently begun to seek cheaper alternatives to Chinese factories by looking to locate elsewhere in Asia (Bradsher, 2013).

However, there is a very real shortsighted problem here and the long-term consequences are steep. What can often end up happening is that to raise the profitability of the business, an employer seeks out cheaper and cheaper labor. This becomes a race to the bottom. Eventually, once people in the developing world enjoy the benefits of a higher standard of living, it becomes painful for them to slip back. Most people quickly and easily adapt to higher standards of living.

Conflict resolution skills can help you deal with the race to the bottom problem now instead of delaying more costly solutions later. Some people may think, “well, that’s not happening in my lifetime; and there’s always someone who doesn’t mind getting paid less”. But anyone who has been alive in the last 20 years can attest to the lack of quality services when one calls a “help center” and how a customer’s trust and esteem of the company is poisoned.

Plus, technology is outpacing job growth and what we are seeing is a corresponding, and alarmingly fast rise in employee anger, fear, and discontent. Customers are also turned off and can start looking elsewhere for higher quality goods and many are starting to vote with their pocket book with an eye to ethical employee treatment.

Clearly, the race to the bottom model, objectively, is fundamentally flawed for both long-term and short-term enterprise. Conflict resolution skills can assist with facilitating the communication for employers and employees. It should never be used as a pretense for underlying greed or exploitation. And people know when they are being lied to—which is why radical transparency makes fiscal sense as well. 

Strategies for Resolving and Managing Employee Conflict

There is an adage “good employees are hard to find. Bad employees are harder to get rid of.” If you have a “bad” employee, the first step is to assess what is going on with you.

1)    Assess the climate

  • If the climate is hostile, build a plan
  • Build a back up plan
  • Build an emergency fund
  • Build your support network
  • Explore other employee opportunities
  • Improve performance

Try to have an open discussion with your employee about how they could grow—most will invite the opportunity to help improve their performance to stay with the company, but they need to know that there’s something in it for them in exchange.

The threat of getting fired, motivates only by inducing fear. In many cases, what employees are looking for to raise their job satisfaction is not just money.

  • Chart your employee’s time, progress, and accomplishments
  • Remain tactful
  • Avoid looking like the unreasonable one

2)    Build your conflict resolution skills by developing communication, organization, expression, and negotiation skills

  • Thoroughly assess and address your communication (for instance, subtle but very important points get lost in translation with overseas VA’s–get clarity, agreement, and confirmation before moving forward)
  • Thoroughly assess your organization (do your employees really know what they need to be doing, why, how, where, to whom and when they need to deliver?)
  • Truly listen to your employees
  • Follow the 7 steps to conflict resolution (see books section)

3)    Examine your relationship with power

  • Ask why you are gripping so tight; is it fear? Fear of not being able to support your family, looking good, impressing a paramour or spouse?
  • Why do you feel the need to control?
  • Try relinquishing the need to control

4)    Cultivate respect for your employees

  • Extending respect to your employees goes incredibly far
  • Aim for respect that is genuine and not patronizing
  • Observe and acknowledge employee’s talents and leverage them
  • Learn about who your employees are (e.g., if they are in another country, learn more about their history, culture, and city so you can get a better handle on the various factors that could be at play that influence their performance)

5)    Cultivate growth for your employees

  • Discover what are your employees’ needs and interests and how they want to grow
  • Align employee’s needs and interests with the company’s mission to discover where there is some overlap
  • Identify employee growth opportunities, craft a plan, execute and measure

6)    Skyrocket morale > And Possibly Your Bottom Line

  • Discover what are your employees’ needs and interests and how they want to grow
  • Experiment with a democratic business model approach that uses voting and checks and balances (see Fisher, 2013)
  • Experiment with giving your employees some power over their destiny (see Zappos’ employee culture that encourages self-expression)
  • Consider more meaningful participation in decisions. NOTE: these decisions must be meaningful to have any value to the employee and thus positive side effects for you
  • These principles promote win-win solutions

7)    Acknowledge and celebrate employee achievement

  • Chart employee milestones and achievements
  • Demonstrate appreciation in ways that your employee will most appreciate (e.g., a visual learner will most appreciate seeing praise—a thank you card; an aural learner will most appreciate hearing praise—a phone call where you tell them how much they are appreciated)
  • Make time for activities that meaningfully connect the group

Interested in learning how to further develop your conflict resolution skills? Consider signing up for notices (never spam) of our latest articles delivered to your inbox. If you have a friend who might find this information helpful, please feel free to share.


Adamson, AP. 2009. Brand digital: simple ways top brands succeed in the digital world. New York: Palgrave Macmillan.

Boushey, Heather and Glynn, Sarah Jane. “There are Significant Business Costs to Replacing Employees.” Center for American Progress 16 Nov. 2012; [Internet]. [cited 17 Sept 2013] Available from http://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf

Bradsher, Keith. “Falling Economic Tide in India Is Exposing Its Chronic Troubles.” The New York Times 4 Sept. 2013; [Internet]. [cited 17 Sept 2013] Available from http://www.nytimes.com/2013/09/05/business/global/indias-falling-economic-tide-exposes-its-chronic-troubles.html?pagewanted=all&_r=0

Census.gov. [Internet]. U.S. Census Bureau; [cited 17 Sept 2013] Available from http://www.census.gov/2010census/

Fisher, Anne. “Free Lunch vs. Other Perks: Why Not Let Employees Vote?” [Internet]. CNN Money 31 May. 2013; [Internet]. [cited 17 Sept 2013] Available from http://money.cnn.com/2013/05/31/smallbusiness/employees-vote/index.html

“Killer Stress: A National Geographic Special”. Prod. National Geographic, 2008. DVD; [cited 2013 Sept 17] Available from: http://www.youtube.com/watch?v=eYG0ZuTv5rs

Sapolsky R. 2004. Why zebras don’t get ulcers. Third Edition. New York: Henry Holt and Company.

Stebner, Beth. “Workplace Morale Heads Down: 70% of Americans Negative About Their Jobs, Gallup Study Shows.” New York Daily News 24 Jun. 2013; [Internet]. [cited 17 Sept 2013] Available from http://www.nydailynews.com/news/national/70-u-s-workers-hate-job-poll-article-1.1381297

U.S. Equal Employment Opportunity Commission. “Pre-Employment Inquiries and Marital Status or Number of Children” [Internet]. [cited 14 Oct 2013] Available from http://www.eeoc.gov/laws/practices/inquiries_marital_status.cfm



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