Democracy and the Workplace: Connecting Dispute Resolution with Organizational Values and Mission Professor Richard C. Reuben University of Missouri-Columbia School of Law January 4, 2005

My central thesis Democratic values lie at the heart of today’s workplaces. While we often think of participation as the primary democratic value, there are others that are just as significant. Dispute resolution mechanisms in today’s workplaces should be implemented in a manner that promotes democratic values rather than diminishes them Doing so will allow dispute resolution to contribute to the overall mission of the organization, including better worker performance, greater compliance with organizational mission, and the creation of a workplace where people want to be and stay.

The Transformation of the Workplace “Old Workplace” Values: Master-Servant Workers viewed as resources to be exploited Loyalty – Psychological contract Commitment to internal labor market “New Workplace” Values: Partnership Workers recognized as individuals to be cultivated Mobility, flexibility and adaptability Importance of “social capital” The sum of an organization’s informal institutions, norms, conventions and social preferences.

Transformation as Democratization Classic Democracy – participatory self-governance in the governmental context Corporate democracy Applies democratic principles in the corporate democracy Generally limited to employee involvement in governance Organizational democracy Extends concept of corporate democracy in several ways Not just governance, but also operation of functions, such as workplace Not just governments and corporations, but also other forms of organization, such as the public sector and not-for-profits Not just participation, but other core democratic values

Core Values of Democracy Personal autonomy Political values Participation Accountability Transparency Rationality Note: Values are relative, not absolute Legal values Equality Due process Social Capital Values Trust Social connection Cooperation and reciprocity Civic virtue

Assessing democratic “character”: Public adjudication vs. mediation Political Values Personal autonomy High Participation Accountability Transparency Rationality Legal Values Equality Due process

Assessing democratic “character”: Public adjudication vs. mediation Political Values Personal autonomy Participation Accountability Transparency Rationality Low Legal Values Equality Due process High High High High High Low Depends High High High Low High Medium

Implications for dispute systems designers and program managers Programs should be structured and operated in ways that foster rather than undermine these values Will make them democracy enhancing, rather than democracy diminishing In so doing, will enhance their legitimacy within the organization Doing so can be challenging, and raises fundamental questions Autonomy – mandatory mediation? Transparency Caucus vs. non-caucus models Tension with confidentiality Due process Who chooses mediator style? Tip: When values collide or are in tension, look to autonomy value

Social Capital in the Organizational Context Definition: The sum of an organization’s informal institutions, norms, conventions and social preferences. All of the other factors contribute to social capital Barometers Trust flowing between employees and management, vertically and horizontally Organizational Citizenship Behavior (OCB) Altruism (helping behaviors) Compliance (rules, policies, etc.) Courtesy (gestures taken to prevent problems) Sportsmanship (willingness to accept bumps in the road without protest) Civic virtue (organizational spiritedness) Norm of reciprocity leads to cycles of social capital within organization “Virtuous cycle” when animated by constructive behaviors “Vicious cycle” when animated by destructive behaviors

Social Capital Barometer 1: Trust Trust is a function of expectations Expectations with respect to trust are set by democratic values Basic expectation regarding dispute resolution Right to “day in court” Anything I want to do other than that Trust with respect to disputes When disputes handled consistently with democratic values, trust in the organization is promoted When disputes handled inconsistently with democratic values, trust in the organization is diminished Managing trust with respect to disputes is especially important Disputes may be a small part of overall functioning of the workplace, but they have a pervasive importance that touches all other aspects

Social Capital Barometer 2: OCB Compliance with Rules, Policies, Mission What is compliance? Willingness to accept and support rules and policies Compliance is a function of trust (Tyler). Two key observations As a general matter, belief in integrity of process more important than the substance of the rules, policies, etc. Process values square with democratic values Whether people given voice, allowed to influence outcome (participation) Whether decisions were explained (rationality) Whether decision maker behaved neutrally (equality) Whether people treated with respect (due process) As a particular matter, we begin with an “illusion of benevolence” Tested against personal experiences To the extent consistent, trust affirming Stokes social capital by eliciting positive reciprocal behaviors To the extent inconsistent, trust disconfirming Starves social capital by eliciting negative reciprocal behaviors

So, what does this all mean in the real world? Performance When dispute resolution reinforces democratic values, it fosters OCB, which in turn enhances task performance Study of mill workers found that helping, sportsmanship, and civic virtue enhanced task performance, measured in terms of quality, quantity of paper produced Study of insurance agents found sportsmanship and civic virtue enhanced performance of insurance agents When dispute resolution frustrates democratic values, it diminishes OCB, which in turn diminishes task performance

Real world implications Compliance Workplace institutions, like dispute resolution, that are consistent with worker expectations regarding democratic values will foster acceptance and support of organizational objectives, strategies, and mission Workplace institutions, like dispute resolution, that are inconsistent with worker expectations with respect to democratic values will encourage non-compliance with organizational objectives, strategies, and mission Reactance theory: when our “free behaviors” are limited, we tend to react destructively

Some concluding questions . . . More empirical research needed to test and refine theories E.g., surveying organizations with democratic and undemocratic dispute resolution programs, and inquiring about how that affects worker perceptions of the organization, task performance, willingness to support mission Beyond the basic guidance I have provided, how should ADR program managers integrate these principles into their daily work? Which daily issues and practices are implicated by the theory? What unique challenges are raised by the governmental context? What barriers are there to applying the theory? How can those barrier be overcome?