Under what circumstances does it become necessary to hire mediators to resolve employee disputes?
Answers
When it is cheaper (as in settling a dispute on an employee contract), or;
When you benefit from a third-party's signature (see above), or;
When either party feels that there has been a breach of trust (again, above), or;
When it is a competence issue (think: two valuable employees who really don't get along, and the otherwise competent manager(s) struggle to resolve it).
To add on to what Keith says - it really depends on the situation at hand. Certain topics have way greater effects than others. If you are talking about a "he/she stole my sale" dispute or something that could lead to a discriminatory allegation later my advice would be different.
Depending on the circumstance, the situation requires a neutral, non-threatening, third party to resolve workplace conflct "quickly" and effectively. In most companies this could be
I do not recommend outsourcing an employee dispute to a mediator. Your money is better spent hiring a Consultant to teach your internal HR the steps to resolve conflict. If that is not possible, the issue should be escalated to your legal counsel. If the case were ever to go to court, the impartiality and credentials of the mediator will be the focus and then the employee dispute. Not sure the benefits of an outside mediator justifies this