“People like to be treated fairly.”

The notion of treating people fairly seems incredibly simple and intuitive.  Yet we are all readily aware of multiple instances when we have been treated unfairly and the negative feelings that resulted from that unfair treatment.  

Taking a closer look at the concept of fairness reveals that it is actually a rather complex and multifaceted concept.  It is no wonder that even the most well-intentioned leader might make decisions that subordinates decry as unfair.  This section of the development guide is designed to provide you with a background to the concept of fairness within an organizational context and provide several guidelines that you can use to make sure the decisions you make are as fair as possible. 

“Why should I, as a leader, treat my subordinates fairly?”

The answer to this question is simple: because it is not only ethical, but clearly it is also in your best interest to do so.  Individuals that are treated unfairly at work respond to this treatment with a variety of negative feelings and behaviors that are destructive to the organization.  For example,

Unfairly treated subordinates:

• Report reduced job satisfaction
• Are less committed to the organization
• Are more likely to quit their jobs
• Are more likely to perform their job poorly
• Are more likely to somehow sabotage the organization (for example: by stealing)³
• Tend to treat customers with less respect⁷

Thus, a successful leader is one that is able to treat their subordinates in a fair manner.

“How do others determine if they are treated fairly or unfairly?” 

This question has been the topic of volumes of research going all the way back to the 1960’s.  In general, the process starts with some event.  For example:

EVENT:

Today at work your boss harshly criticized your work in the middle of a meeting.

In our determination of whether or not we were treated fairly, we tend to make comparisons between what actually happened in the course of the event, and what should or could have happened.  We determine what should or could have happened through the application of fairness norms.  A fairness norm is a standard of conduct that most people hold about what is fair and not fair.  A common fairness norm that we apply to situations where we have interpersonal contact with others (as the in the above example about the meeting at work) is that individuals are polite to us and treat us with respect.  Thus, if a norm or standard we apply to a situation is violated, we feel that an injustice has occurred.⁴

“Are the same fairness norms applied to all situations?”

No.  We have different fairness norms we apply to different situations.  Essentially, people tend to focus their evaluations of fairness on four different areas, each with their own distinct fairness norms:

• The fairness of resource allocations (sometimes referred to as “distributive justice”)
  • Often individuals evaluate the fairness of resource allocations in organizations.  An resource that is being allocated might be material in nature (salary and benefits) or immaterial in nature (reputation or status).  A common example of this would be making an evaluation of whether or not what you get paid for your job (your salary) is fair, given your perceptions of others’ salaries.

• The fairness of organizational procedures (e.g. “procedural justice”)
  • We evaluate the fairness of organizational policies and procedures that effect us.  Examples of policies and procedures include employee selection and promotion practices. 

• The fairness of interpersonal interactions (e.g. “interpersonal justice”)
  • Fairness evaluations are often focused on the interactions we have with others.  The average job in an organization involves multiple interactions with many individuals.  Each of these interactions could potentially be perceived as unfair and result in negative ramifications.

• The fairness of information exchanges (e.g. “informational justice”)
  • In the course of enacting procedures in organizations information is often exchanged to justify or explain the procedure.  Individuals make evaluation of how fair these information exchanges are. 

“How can I make sure my actions are in accordance with fairness norms?  How can I ensure that I am treating others fairly as often as I possibly can?”

Perhaps it is impossible as a leader to always have everyone feel they are treated fairly all the time.  People have the freedom to apply a variety of norms to different situations that, no matter what the action, will lead them to feel they are being treated unfairly.  However, we can apply a series of prescriptive standards to our behavior (and organizational designs) to maximize the likelihood that individuals working in or interacting with the organization will walk away from the interaction feeling that they were treated fairly. 

Behavioral Guidelines For Leaders: Engendering Fairness Perceptions

Resource allocations:

Resources are often scarce in organizations.  How can you determine how to best allocate resources in your organization?  For example, you have a limited amount of money to divide between your employees for their holiday bonus.  How should you split up the money?  Three standards can be used in situations like this.⁵

• Equality: The money is divided equally between employees.  Dividing resources equally tends to maximize social harmony, but you risk alienating your highest performers.
• Equity: The employees who perform the best or are most senior get more of the bonus money.  Dividing resources equitably rewards (and therefore encourages) high performance in an organization, but can lead to resentment.
• Need: The individuals that need the money the most get it (perhaps number of children might be used as an index of need). 

The decision rule you employ should be determined based on the context you are making the decision in.  All resource allocations will have their drawbacks or risks associated with them.  A leader that is in touch with their fellow employees and their organization should have a good sense of what is acceptable under most circumstances.  Also keep in mind the following points⁶:

• Adhere to commitments: give individuals what was promised to them.
• Make sure reward distributions adhere to existing laws and regulations.
• We generally think that it is fair for individuals to continue to possess what we have already given them, that that it is unfair to take that away.  Make sure that, when making resource allocation decisions, the decision is made carefully since it is extremely difficult to “go back” once a resource allocation has been made. 

Procedures:

To maximize the fairness perceptions of procedures and policies, they should be designed and implemented according to the following standards⁶:

• Those affected by the procedure should have the ability to express views and feelings about procedure.  Feedback should be collected at regular intervals to ensure that individuals affected by the procedure have a “voice.” 
• The procedure should be designed to allow individuals to influence the procedure.  For example, if a new employee needed to be hired, incumbent employees might be included in the interviewing process.  This would engender fairness perceptions of the hiring process, as individuals have the ability to participate in the procedure and influence the outcome.
• Procedures should be applied consistently and in a manner that is free of bias.  It is crucial to be even handed in the implementation of procedures.  Having formal written standards that are consistently adhered to will engender a sense that the organization does not play “favorites” or “politics” when making decisions. 
• When designing a procedure or policy, be sure to base its creation on accurate information.  Gather adequate amounts of data to determine the root cause of a problem before implementing a stop-gap procedure.  Another example would be getting good performance data before deciding who gets the big raise. 
• Design procedures so that individuals affected by it have the ability to appeal the results of procedure if they disagree with them.  Again, always provide affected individuals with a “voice.”
• Procedures should uphold ethical and moral standards (avoidance of harm, reversibility, etc.).  A quick rule of thumb that can be applied is the “golden rule:” Would I be satisfied if this procedure or policy was enacted upon me/my family? 

Interpersonal Interactions:

Interacting with people is a key aspect of being a leader.  Interactions with others are also a time that individuals make judegments about whether or not we have treated them fairly.  Be sure to¹: 

• Always take the time to treat others (and their interests) with dignity and respect.
• Be polite when interacting with other people. A little extra effort can go a long way towards making others feel that you value them and their efforts.
• Refrain from improper remarks.  This includes demeaning comments, teasing, vulgar or highly sexualized language.
• Be candid and forthwith with others. Honesty is always the best policy.

Information Exchanges:

Finally, in the course of leadership activities, information must be exchanged between leaders and subordinates that explains and documents procedures, policies, and organizational happenings.  Make sure to²:

• Provide a reasonably thorough explanation of procedures. Give the information that they need, but don’t provide so much that it makes it impossible to understand what is happening.
• Provide details about procedures in a timely manner.
• Tailor information to meet the needs of individuals requesting it. Though it might not always be possible to completely customize all information, do your best to make the information as relevant to individuals as possible. 

Treating people fairly is an extremely important part of being an effective leader.  Following these tips should help you maximize fairness perceptions among those you are leading or working with. 

Knowledge of Organizational Justice Principles:  Knowing and understanding fairness principles and being able to apply them to ensure subordinates are treated fairly.  May include knowledge and application of equity theory/distributive justice, procedural, interpersonal and informational justice concepts. (social responsibility dimension).

Instituting and Following Fair Procedures:  Instituting and applying rules and procedures in a consistent, unbiased, accurate, and correctable fashion to ensure that subordinates know that fair rules are being used (social responsibility dimension).

Explaining Decisions in a Respectful Manner:  Explaining decisions that affect subordinates thoroughly and in a manner that demonstrates dignity and respect for the subordinates (social responsibility dimension).

Distributing Rewards Fairly:  Ensuring that pay, recognition, and other rewards are distributed in a fair manner, with clear guidelines and enforcement of those guidelines (social responsibility dimension).

REFERENCES:

¹Bies, R. J., & Moag, J. F. (1986).  Interactional Justice:  Communication criteria of

            fairness.  In R. J. Lewicki, B. H. Shpeeard, & M. H. Bazerman (Eds.), Research

            on negotiations in organizations (Vol 1, pp. 43-55). Greenwich, CT: JAI Press. 

²Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O., & Ng, K. Y. (2001).  Justice

            at the millennium: A meta-analytic review of 25 years of organizational justice

            research.  Journal of Applied Psychology, 86, 425-445. 

³Cohen-Charash, Y., & Spector, P. E. (2001).  The role of justice in organizations: A

meta-analysis.  Organizational Behavior and Human Decision Process, 86, 278-321.

⁴Folger, R., & Cropanzano, R. (2001) Fairness theory: Justice as accountability.  In J.

Greenberg & R. Cropanzano (Eds.), Advances in organizational justice (pp. 1-55). Lexington, MA: New Lexington Press. 

⁵Greenberg, J. (1990b).  Organizational justice: Yesterday, today, and tomorrow.  Journal

            of Management, 16, 399-432. 

⁶Leventhal, G. S. (1980).  What should be done with equity theory?  New approaches

            to the study of fairness in social relationships. In K. Gergen, M. Greenberg, &

            R. Willis (Eds.), Social exchange: Advances in theory and research (pp. 27-55).

            New York: Plenum Press. 

⁷Simons, T., & Roberson, Q. (2003). Why managers should care about fairness: The       
            effects of aggregate justice perceptions on organizational outcomes. Journal of
            Applied Psychology, 88(3), 432-443.

~ Contributed by Brian Siers