Employer of Choice: Fairness

From the receptionist at the front door to top executives, people want to be treated fairly.

Trap: Understanding fairness can be challenging. An organizational policy can be viewed as fair by some and unfair by others.

Fairness is important. When employees are treated unfairly, they:

• are more negatively affected by their workload
• have lower productivity
• are more likely to quit
• have higher levels of conflict and
• are more likely to resort to collective bargaining to solve their problems.

Symptoms like these are costly to both the employees and the organization. Most often, we create our judgment of “fairness” by comparing how things are with how we think they should be. Our judgment of how things should be can be gained externally (e.g., family, friends, other employees, or the media) and internally (e.g., your personal judgments, experiences you have had in the past, or agreements you have made).

More is Not Necessarily Better

Fairness seems to have a “threshold” effect. When a work situation is seen as unfair, this can be highly motivating to employees to try to correct the injustice.

Once employees feel that they are being treated fairly, being treated exceptionally fairly is not much more motivating. As with employee satisfaction, fairness can be thought of as either a single construct (e.g., in general, are you treated fairly?) or it can be thought of as a set of separate dimensions (fairness of pay, work, promotions, managers, etc.).

In our employee survey work, we have focused on two forms of fairness. These seem to be consistently motivating to employees:

• fairness of managers, and
• fairness of pay.

Although these two factors can be related (an unfair manager may be the source of unfair pay), in practice, these are generally distinct.

Challenge: There is no simple way to know in advance what will be seen as fair.

• Sometimes, treating everyone the same way seems to be fair (e.g. applying the same rules to all employees; equal pay for equal work).
• Sometimes, treating people in different ways is considered fair (e.g., greater rewards and recognition for greater contributions, relaxing certain requirements during times of family crisis).

Important: Realize that nothing is inherently fair. As individuals, we decide what is fair. Language plays a major role in this process.

Actions:

• Learn what employees think is fair. Often that discussion will reveal a solution that is easy to manage and has minimal cost.
• Use communication to “create fairness.” Explaining the rationale for a decision can frequently defuse negative reactions. Take an active role in defining situations, rather than waiting for others to do so.
• Have employees participate in making decisions that affect them. People tend to see decisions as fair if they helped make those decisions.
• The more a decision affects employees, the more important for employees to participate.

Manager Fairness

Employees need to know you are doing the best you can in an imperfect world. Periodic, sincere communication from managers can help preserve cooperation and trust.

Our employee survey research findings show that when managers treat others fairly,

• employees are more satisfied and engaged
• there is less blame and conflict in workteams.

Indirectly, fairness also

• increases teamwork
• increases employee commitment
• increases retention and
• increases productivity.

Thus, manager fairness is not related simply to “soft returns” (e.g. higher satisfaction). The data from employee surveys show that manager fairness increases teamwork, retention, and productivity – which have genuine bottom-line consequences.

Fairness of Pay

It is interesting that the perception of being paid fairly is more motivating than the actual level of pay. Said another way, those who are paid more are not necessarily more satisfied or engaged.

When people feel they are paid fairly, they are more likely to:

• be satisfied,
• feel that the organization will satisfy their long-term needs and goals (expectations of higher future satisfaction), and
• feel that their workload is reasonable.

Indirectly, fairness of pay also reduces stress and increases retention.

Overall, prudent organizations will carefully manage fairness. This creates a more satisfied and engaged workforce and makes genuine contributions to the bottom-line – while positioning your organization as an Employer of Choice.