April 17, 2009

Fair Play in Tough Times

Fairness matters in tough times even more than in good times. Joel Brockner offers guidelines to help firms embrace fair process.


Fairness matters. We know from research that firms that practice fairness benefit from higher levels of employee commitment and productivity. And when it comes to fairness, how things are done matters more in tough times than in good times.

It’s hard to be fair — human behavior and institutional structures seem to conspire against it. Managers might confuse fairness with weakness and loss of power and authority. Or, when faced with making difficult decisions fairly — like deciding who stays and who goes — they may succumb to the only-too-human impulse to avoid uncomfortable conversations. Executives might be more comfortable looking at quantitative solutions to poor performance than at qualitative options that incorporate fair process. Sometimes a firm’s legal policies are overly reliant on the questionable assumption that fair process will increase a firm’s susceptibility to lawsuits.

But fairness counts, for morale and for the bottom line. And in the context of bad times, managers and executives should understand that process fairness counts as much as — and sometimes more than — outcome fairness.

An easy way to distinguish process fairness from outcome fairness is to ask, can you throw money at the situation? A CEO who issues generous severance packages to laid-off workers may be practicing outcome fairness, but it is also important to look at how that CEO made that decision and communicated it to his employees to determine if he’s exercised process fairness.

For example, did the CEO or other leaders provide employees a way to have some input into the decision-making process? Do employees feel decisions were made on the basis of accurate information, even if the outcome wasn’t the one they advocated for? Were they given advance notice, or were changes made too quickly?

Just as important, how did the leaders who planned and executed the process behave — were they courteous, respectful, empathetic, compassionate? Have they explained why they are doing what they are doing?

When management gives consideration to these questions and behaves accordingly, they have practiced high process fairness.

I often hear executives talk about the people who are losing their jobs as the ones affected by layoffs. Understanding that everyone is affected by layoffs, even those who keep their jobs, is part of understanding process fairness.

Several colleagues and I conducted research in which we looked at the organizational commitment shown by two different groups of employees, one that had survived a downsizing and the other in which no layoffs had occurred. Unsurprisingly, morale and productivity was much lower overall for those who survived the downsizing than for the group in which no layoffs took place. But among the group who survived layoffs, those who were more involved in the decision-making in the aftermath showed just as high morale and productivity as the group in which no layoffs had occurred. Involving people in the decision-making process can be as simple as soliciting employee’s opinions on possible courses of action. It is probably the single cardinal element of fair process, and in this case it actually eliminated the negative effects of surviving a layoff.

Like most things in life, fairness has more impact when it’s genuine. Some people believe that being seen as fair is more important than actually being fair. A few people may get away with sham fairness, but more often than not people see right through it. You have to not only be fair, but also be seen as fair, and as a manager you have a much better chance of being seen as fair if you really mean it.

It’s tempting to make the excuse that it’s too time-consuming or costly to be fair, especially now that companies are facing pressure to cut their losses, and quickly. Don’t make that mistake. Fairness can be taught, and even a two-hour seminar can go a long way toward helping senior managers become more skilled at and more motivated to embrace process fairness. Research has shown that subordinates of managers who have undergone such training are less likely to experience stress and are more likely to put in extra effort on the job. And, subordinates on the receiving end of process fairness are more likely to practice it with their subordinates. In this way, managers can — and should — become role models, extending the cycle of process fairness.

Take care to set realistic expectations about what even the best process fairness can accomplish. Practicing process fairness in tough times is probably not going to result in your employees wildly congratulating you. At best, the response might be moderately positive, but degree matters — moderately positive compared with a lawsuit is a big difference.

Don’t neglect celebrating fairness. Some people do it better than others, and it takes time to do it right. When there are examples of fairness, publicize those examples to reinforce its importance and normalize it.

For the foreseeable future we’re stuck confronting hard choices. Managers are probably feeling overwhelmed, demoralized and depressed by the binding situation we are all facing. But if you think of yourself as an agent of change, know that you have a chance to really make a difference now. In fact, your actions carry more impact now than they would in a more stable environment. In short, fairness matters more than ever, and so do the steps you take to manage the uncertainty produced by the swirl of change that surrounds us.

Joel Brockner is the Phillip Hettleman Professor of Business and chair of the Management Division at Columbia Business School.

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