Fair is fair: build an organization with justice in the midst of tough decisions

There are so many situations that arise in the workplace that have the potential to be cultural minefields. A worker comes to you asking for a promotion that you already have in mind for someone else. Two workers miss work without going through the appropriate channels to let people know, but only one of them seems to have a legitimate reason. You want to move someone who is underperforming on your sales team to a new role in service. The way that leaders handle these situations will shape employees’ responses and attitudes in the fallout of a key decision. It turns out, one of the quickest ways to create negative attitudes and disengagement is by making employee’s feel that the decision you made was in some way unfair and unjust.

Studies conducted to gauge the importance of fairness in the workplace have consistently demonstrated that fairness has a strong positive effect on business outcomes like job engagement, turnover intention, and the employees identification with the company (essentially being proud to identify as a member of your team). [1] Additionally, in situations where tough decisions like downsizing had to be made, employees who perceived the situation as fair were far less likely to sue for wrongful termination (1% vs 16% when employees felt unfairly treated). [1] The way you reward, manage, and recognize your team presents many scenarios that could either be perceived as fair or unfair.

It is important to note that fairness in the workplace is largely in the eye of the beholder. Your systems on paper could have absolute equity: everyone treated and rewarded by identical standards. However, if your people don’t perceive your decisions as fair and just, then culturally it simply isn’t. While your management style, processes and decision making should make every effort to be without bias or favoritism, it is the perceptions of fairness and justice that drive healthy cultural responses like engagement, pride and performance. [2]

How are fairness and justice assessed?

Perceptions of fairness and justice have their foundations in social comparison. Think back to when you were a kid. If you were talking in class and the teacher called you out for it, it is human instinct to jump to thoughts like “Why was I the only one called out, I was talking to two other people?” In the workplace, social comparison is readily available. Co-workers share similar positions and navigate similar challenges. Beyond that they can discuss their work and environment with acquaintances in the industry and other peer groups. Another interesting note is that employees’ perceptions of fairness have a strong asymmetry: if they see something as unfair they will have a much stronger negative reaction to it than they would have a positive reaction to perceiving something as fair. [2] This demonstrates that justice is a baseline expectation for most people and not some perk that will wow them.

Organizational justice can be broken into three primary categories — distributive justice, procedural justice, and interactional justice. Each will impact the attitudes and behaviors of your employees towards the organization. [3]

Distributive justice is focused on both tangible and intangible outcomes in your company. Tangible outcomes include things like pay scale and promotions while an example of an intangible outcome is positive feedback or praise.

Procedural justice focuses on the structure and procedures of the organization that leads to decision making and the outcomes mentioned above. This is often where the friction of organizational justice occurs and should often be the focus of a company’s efforts to increase perceptions of fairness and justice. [4] Employees want the organization to have consistent, accurate, and ethical processes and decision making that is free from any bias.

Interactional justice is focused on how employees feel they are treated in the minefield scenarios we mentioned. Did leadership explain the decision with accurate information, and treat them with respect, dignity, and sensitivity.

Focus on procedural justice

Of the three main components of organizational justice, procedural justice has been demonstrated through workplace studies to have the largest impact on employee perceptions of overall justice, as well as their behaviors: engagement, intent to leave, and organizational pride. [4] To reiterate, it really is all about perceptions. You could have the most objectively just systems in place, and if your employees felt they were unfair they would act accordingly.

Now we are not saying that you should abandon having fair systems and decision making in place. Objective fairness will definitely still be perceived by employees. What we are saying is that the most important factor is your team, and whether they believe leadership is treating the entire team with equity. The impacts of this belief are tangible. A study of lawsuits based on termination concluded that the expected savings of perceived fairness was $1.28 million for every 100 employees dismissed at a conservative estimation of legal fees. [5] Performance also gains a bump when employees perceive fair processes, with employees becoming more creative, innovative and willing to work hard [5]

Most businesses probably want to avoid legal fees and have engaged, high performing employees, So what can you do to create a structure that employees perceive to be fair and just? There are two dimensions to focus on: the employee, and leadership.

The Employee

If it feels like we are getting repetitive, well we are. Your people are the foundation of your organization, and so any attempt to create fairness and equality starts with them. Here are some ways you can demonstrate your commitment to fairness to your team:

Transparency

One of the fastest ways to make difficult situations worse is by concealing the reasoning behind it. Take a promotion decision as an example. If you pass on one employee for another, make sure you provide both employees with honest and sincere explanations for your decision: how you made it, and what factors you took into consideration. Not disclosing why decisions are reached opens the door for guesswork and perceptions of unfairness.

Accuracy

Make sure that your decisions are made based on accurate information. If you make decisions without considering the whole picture, employees are likely to perceive your decisions as arbitrary.

Consistency

Apply your processes for decision making or discipline as uniformly as possible. Employees will notice if certain team members are held to a different standard, and you can count on them thinking that is both unfair and even unethical. Note: consistency doesn’t mean uniformity without compassion. Your employees are human and not everyone’s situation is identical. If two employees miss time but one misses due to laziness and the other misses due to a medical emergency or a family tragedy — most people will understand reasonable exceptions to your policies.

Employee Voice

If you take one thing away from this breakdown let it be this: the most important thing you can do to communicate your dedication to fairness and justice is to give your employees a voice in the process. Studies showed that having a voice was the most directly related to willingness to work hard and overall performance, and employees that felt they had an adequate chance to state their opinions and feel involved were most likely to perceive their work climate as procedurally just [4]. The decisions you make have a serious impact on the lives of your team. They have a right to participate in those decisions and should get the chance to state their case and provide input. While some decisions will have to be final, be open to hearing new ideas and learning from your employees and ultimately making the best decisions for your organization as a whole.

Lead by example

Without mincing any words: the success of your organization to create an environment of justice and fairness will only be possible through strong leadership. If there is any doubt about whether leaders treat people with respect and deal with their teams in a fair and open manner, there will be doubts about the overall climate within the business. But what does fair and just management look like? There are a number of characteristics that are vital.

Modeling behavior

Great management isn’t above the law. Of course you have some freedoms that other employees will not. However, you need to ensure that you are modeling the same types of behavior that you expect from your team. If you want people to stay late and work hard, but they see you taking off early or lacking in productivity, you will start to breed resentment. Walk the talk.

Honest communication

Honest leaders breed an honest culture. Do your best to communicate openly and transparently about why decisions are made, why expectations are set at a given level, or why a specific procedure is required. Without trust-based communication, it will be very challenging for employees to believe management, and vice versa.

Have compassion

Give your employees the same grace you would want someone to give you — people have good and bad days, and life throws various challenges at us all. Rules and fairness are a piece of the puzzle, but blindly adhering to strict guidelines can create an environment that could demoralize your team and even feel cruel. Consider circumstances that could be affecting your team, ask for clarity if you feel like there is more to the story, and be flexible to make exceptions when it is justified.

Be willing to learn

Some people believe in natural-born leaders. But actually, studies on heritable traits and human development concluded that 70% of a leader’s capacity and excellence is built through experiential growth, not their genetics. [6] Great leaders are great learners. As you try to create a fair and just workplace, be open to the possibility that you will make mistakes. Be intentional about asking your team for feedback and input into the many decisions you make that will have an impact on their work and life. It can be challenging to be confronted and told that a decision we made was biased or unfair, but leadership requires the humility to accept our failings and make them right.

Creating a climate that employees perceive to be just and fair won’t happen overnight. It will require a thorough examination of culture, processes, and decision making throughout an organization. Additionally, it requires an investment of time and resources into understanding your team and getting their feedback. Perhaps most challenging of all will be the growth that may be required of leadership to create the necessary organizational change. But the rewards are worth the effort — employees that are engaged, work harder, and are in an environment that allows them to thrive.

If you have any questions about fairness and justice in the workplace, or any of the other dimensions of a healthy culture, we would love to help. Just follow this link to contact us!

References:

1. Hassan, S. (n.d.). Does fair treatment in the workplace matter? an assessment of organizational fairness and employee outcomes in government. ResearchGate. Retrieved November 17, 2021, from https://www.researchgate.net/publication/258126455_Does_Fair_Treatment_in_the_Workplace_Matter_An_Assessment_of_Organizational_Fairness_and_Employee_Outcomes_in_Government.
2. Chan, D. (2011). Perceptions of fairness. CSC. Retrieved November 17, 2021, from https://www.csc.gov.sg/articles/perceptions-of-fairness.
3. Kim, TY., Lin, XW. & Leung, K. A Dynamic Approach to Fairness: Effects of Temporal Changes of Fairness Perceptions on Job Attitudes. J Bus Psychol 30, 163–175 (2015). https://doi.org/10.1007/s10869-013-9341-6
4. Newman, K. L. (n.d.). The just organization: Creating and maintaining justice in work environments. Retrieved November 17, 2021, from https://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=1784&context=wlulr.
5. Brockner, J. (2015, May 4). Why it’s so hard to be fair. Harvard Business Review. Retrieved November 17, 2021, from https://hbr.org/2006/03/why-its-so-hard-to-be-fair.
6. Kari Keating, D. R. (2020, June 19). Developmental readiness for leadership: The differential effects of leadership courses on creating “Ready, willing, and able” leaders. Journal of Leadership Education. Retrieved November 17, 2021, from https://journalofleadershiped.org/jole_articles/developmental-readiness-for-leadership-the-differential-effects-of-leadership-courses-on-creating-ready-willing-and-able-leaders/.