No boss wants their employees to be unhappy at work. After all, happiness at work does not just lead to a better atmosphere, but greater productivity. Recent University of Warwick research found happiness made people 12 per cent more effective.

But, even if you put in place all the measures that you can to try to keep staff morale high, there will inevitably be a time when an employee brings a grievance to you, or one of your managers. Whether the complaint is about pay, the behaviour of a colleague, a heavy workload, or another aspect of working life, you need to have a system in place to deal with it. Here is a ten-step guide to handling a grievance properly and effectively.

1. Can it be dealt with informally? Often, a grievance can be nipped in the bud with some prompt and sensitive informal action. As soon as an employee makes a complaint, their line manager should arrange to talk to them about why they are dissatisfied and to look for a solution to the problem. In many cases, a quiet word is all that is required to resolve an issue.
2. Ask the right questions. A helpful question to ask at any stage is what outcome an employee wants following their complaint. This should focus their mind on working towards a solution rather than looking back at the problem.
3. If you can’t resolve any issue in an informal way, then ask your employee to put their grievance in writing so you can take it forward.
4. Make sure you comply with your own manual and the ACAS code of practice on disciplinary and grievance procedure, which sets out advice on establishing the facts of each case, holding meetings and deciding on the best course of action.
5. The most appropriate person should deal with the grievance. In most cases, this will be the employee’s line manager, who should have an in-depth understanding of the issues involved. But, if the grievance relates to the manager themselves, then another manager should step in, or a member of the HR department. Small businesses may decide to bring in an outside adviser to hear the grievance.
6. Establish the facts. It’s important to carry out a full investigation into the grievance and collect all relevant evidence, whether that is in the form of emails, recorded phone calls or through speaking to other relevant parties.
7. Invite any employee who the grievance is against to a meeting and make sure they are aware that they have a right to be accompanied by a colleague or a trade union representative if a warning or disciplinary action could be on the cards.
8. Keep records. You need to make sure you have every step of the grievance process in writing, to protect your business in the event of further action or a dispute over what was said. Write a letter to employees inviting them to meetings, keep minutes and inform employees in writing about decisions made.
9. Communicate. It’s vital that all parties involved in any grievance, whether they are making a complaint, or they have had a complaint made against them, are aware of what happens at each stage of the process, along with the outcome of any decision. Give full reasons for your decisions.
10. Be ready for an appeal. If a grievance is rejected or partially rejected, the employee who brought it does have the right to appeal the decision. Wherever possible, an appeal should be heard by a manager not previously involved in the case.

By having the correct procedures drawn up, put down in writing in your manuals and making sure they are followed in day-to-day working life, you protect yourself as much as possible from grievances arising.

Neil Atkinson is founder of Deminos.

Further reading on staff grievances

• How does workplace banter turn into a claim against a business?