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The typical goal of grievance arbitration is to resolve disputes based on contract interpretation. In many labor agreements, arbitration serves as a means to settle disagreements that arise concerning the interpretation or application of specific terms in the contract between the employer and the employees, typically represented by a union.

When a grievance arises, it often involves conflicting views on how certain provisions of the contract should be understood or implemented. Arbitration provides a formalized process where an impartial third party evaluates the arguments and evidence presented by both sides and makes a binding decision to resolve the issue. This is particularly important in maintaining workplace harmony and ensuring that the agreed-upon rights and obligations of both parties are upheld.

The other options, while related to workplace relations, do not specifically target the nature and purpose of grievance arbitration. Mediating between management and employees is more aligned with general conflict resolution processes, while enforcing workplace policies typically falls under management's responsibilities. Negotiating new contracts is a separate process involving collective bargaining, distinct from the arbitration of existing grievances.