Are Leaders Fair? On the Need to Understand Fairness Management in Organisations

July 17, 2014 • BLOGS, David De Cremer on Management, LEADERSHIP, Leadership Development

By D. De Cremer, G. Houwelingen, C. Ilse, H. Niek, L. Brebels, M. Van Dijke & A. Van Hiel

It is human nature to want to be treated fairly, and nowhere is this more evident than in the workplace. Leaders need to effectively manage the perceived fairness of decision-making for a satisfied, happy, and productive workforce. This article discusses the measures leaders should take to ensure procedural justice in their company.

When company Z decided to implement a new appraisal procedure to evaluate high potentials, the general attitude was one of uncertainty and fear that promotions would be more difficult to achieve. True, the criteria were stricter, making it more difficult to move up the ranks. To their surprise, however, when the new procedures were actually used, employees did not suffer from more distress and none of them expressed a desire to leave the company. Many of them were positive about the new appraisal system and praised the enormous increase in transparency, despite making it hard for them to achieve a quick promotion. Quite often, companies find themselves in situations where they wish to transform their decisions-making procedures, but at the same time fear the negative consequences of destroying their human capital. In this process, it is clear that when transparency, consistency and positive treatment accompanies such big changes, the results are often more positive than ever expected.

Procedural justice it is one of the cheapest organizational means around to promote and maintain employees’ intrinsic motivation.

Why may this be the case? In such successful situations, leadership takes care of an important human concern: Fairness. To be more precise, they focus on managing the perceived fairness of the procedures used to make allocation decisions; referred to as procedural justice. It is no secret that fairness matters to all of us working in organizations. It is perceived as a basic right for those at the receiving end and a moral obligation for those making decisions. When fair procedures are used during the decision-making process, many positive outcomes emerge. At the individual level, employees feel more satisfied, show more cooperation and citizenship behavior, and retaliatory actions and turnover decreases. At the company level, both employees and customers exhibit more trust in the company, performance levels increase, and a positive reputation of being a thoughtful and moral employer emerges in the market. What makes the employment of procedural justice as part of your leadership style even more appealing is that it carries no financial burden. In fact, it is one of the cheapest organizational means around to promote and maintain employees’ intrinsic motivation. Indeed, contrary to the use of control and monitoring systems, it is inexpensive to provide voice to your employees, treat them in consistent ways and suppress judgmental biases. If the benefits of procedural justice are so obvious and its appeal and effectiveness has been demonstrated in a vast amount of studies during the last 30 years, why then do so many of our organizational leaders refrain from using it? Why then it is that too many of our leaders act as managers with a primary – and sometimes even sole – focus on the delivery of valuable and tangible outcomes rather than to promote harmony and motivation among employees?

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