A grievance procedure is a step by step process that an employee must go through to get a complaint addressed satisfactorily. A formal written complaint moves from one level up to the higher level to get resolved. A grievance procedure is typically included in collective bargaining agreements, it is also a means of resolution dispute that used by company to address grievances by employees, customers, suppliers and competitors. The procedure provides hierarchical structure for settling and presenting workplace disputes.
The best known application of this procedure is a formal process that outlined in labor contracts. The procedure does not necessarily to be elaborate and formal, overly formal grievance is discouraged by airing of disputes on a timely manner. In small business grievance procedure may consists few lines in employee manual or designation of single ombudsman to handle the problem as they develop. The peer review of the employee that is concerned is popular way to put an address of grievances, while some larger companies create entire department dedicated in fielding complaints from customers or employees.
Whatever form may take grievance procedure is intended to allow the companies to resolve and hear complaints in a cost-effective and timely manner, before it will result to litigation. Knowing the formal procedures that are available often encourages the employees to voice out their concerns regarding company policies before any major problems develop. Because of that, managers will not ignore problems because they are aware that upper management will become involved with the grievance process. Union settings help protect the employees against any arbitrary decisions of the management regarding the discipline, benefits, promotions and discharge. They are also providing labor unions and formal process for the provisions of contracts.
Having grievance procedures is important to both non-unionized and unionized settings; the companies must support the written policies of their own with consistent actions to maintain a good employee relations. To make it work all parties must treat it with attitude that serves their own mutual interest. Effective grievance ideally help the management to discover and correct all problems before it advances to serious trouble.
For the procedure to become effective both parties should look at it as positive force that can facilitate an open discussion of all issues. There are cases that settling of grievances is a sort of competition that reinforces a "them versus us" mentality between management and labor. In other cases, the employees are quiet hesitant to apply grievances process because of fear of a recrimination. There are studies that shows that employees who rise grievances most likely to have lower evaluation of performance, work attendance and promotion rate. A grievance procedure and employment law must be followed by the company or union to solve any problems that may arise. Company's grievance procedures are including steps that prevent a backlash from employees who prefer to use it.
If situation can not be resolved, final step in grievance process is both for parties to present at their side to pre-designated arbitrator. The role is to identify the rights of each party under labor agreement; the decision of the arbitrator is final and usually can not be changed.