Imagine the following scenario: You and your executive team work hard to craft a bonus plan for your employees. You truly want them to share in the rewards of the organization when you’ve had a good year. The bonus plan you roll out to employees involves a formula that you’re convinced fairly distributes bonuses to everyone.
Immediately, the plan hits a wall of confusion and cries of unfairness from many of your employees.
Here’s another scenario: After careful deliberation, you decide that your performance appraisal system needs to be revamped. You recraft the dimensions against which managers assess their people, and you create a new form to document these reviews on an annual basis. Naturally, you’re excited about how this will help clarify performance expectations and promote accountability.
This plan also receives immediate resistance. People just aren’t buying into the whole idea of the program.
Again, what happened?
One key here is the difference between objective fairness and subjective fairness.
In both cases, it very well may be true that the programs were objectively fair. You and your team did some admirably hard work in determining the shape and scope of the initiatives, and it’s clear to you that it’s a fair process.
The problem is that you forgot about the importance of subjective fairness. Namely, it’s not enough that something is objectively fair. It must, in addition, be perceived as fair by the people who are affected.
Fairness, in other words, is in the eyes of the beholder. Your employees just don’t care that you think something is fair; it’s their perception of the situation that matters most.
So, how can you influence the subjective nature of fairness? How can you increase the probability of your decisions being perceived as fair by others?
One key to this puzzle is to distinguish between two major types of fairness—or what researchers call “justice”—in organizations: (1) distributive justice and (2) procedural justice.
Distributive justice is about the fairness of outcomes. It’s about the perception that people are getting what they deserve, what is equitable.
Procedural justice is about the fairness people perceive regarding the process used to make decisions. I may not like that the guy in the office next to me got a bigger bonus than I did, but if I fully understand the process behind that decision and if that process seems fair, I’m likely to at least accept what happened and not feel like my fairness was violated.
Both distributive justice and procedural justice are perceptual, so they have an important subjective component. In practice, however, it’s procedural justice that often can tip the scales of fairness in people’s minds even more than distributive justice. And it’s the one that I often see overlooked by leaders and managers when they make decisions.
Fairness perceptions correlate with a host of good attitudes and behaviors in organizations, including higher job satisfaction, commitment to the organization, trust, evaluations of authority (your boss or the overall system) and job performance.
But which one—distributive justice or procedural justice—tends to have a bigger influence? Overall, it’s procedural justice, the perceptions of fairness about how decisions were made, that’s a little bit more powerful.
So it behooves all us who make decisions that affect other people to keep in mind that it’s not just about whether we think something is fair or not. That’s just not enough.
We must keep in mind the subjective nature of fairness, the critical importance of perceptions. We’d do well to remember to clearly articulate the processes and procedures through which we make our decisions. Doing so will likely help satisfy people’s need for understanding the “how” part of what we do as leaders, not just the “what.”
And that, according to science, will increase perceptions of fairness, leading to a host of positive outcomes and healthier organizations.
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About Ben Baran
Ben Baran, Ph.D., is probably one of the few people in the world who is equally comfortable in a university classroom, a corporate boardroom and in full body armor carrying a U.S. government-issued M4 assault rifle. Visit: www.benbaran.com.