Why fairness is important to business




















Some might not care, while others might feel especially targeted. Be prepared to address the perception of discrimination with facts and logical reasons. Be honest. Always be prepared to explain the rationale behind decisions, including what is known, not known, and why now. Also, be honest with yourself and understand why you tend to lean in a certain direction vs. Acknowledge mistakes. Decisions are made with available data, which are never perfect. If needed, apologize to those negatively impacted by it.

Live the Golden Rule. Always treat others as you would like to be treated. This tends to be easier in familiar situations. But in unfamiliar situations, this requires putting yourself in the shoes of others, which can be difficult. Increased trust, of management and fellow employees, improves collaboration and teamwork.

Improved collaboration increases productivity and employee engagement. Higher employee engagement lowers employee turnover, and thereby costs. Treating your business partners, customers and other community members with honesty, trust, fairness and respect contributes to strength and longevity in your business relationships.

To understand the importance of various traits in relationships, you need to consider the types of relationships important in the business world. Customers, the community, employees, business partners and suppliers are among the central stakeholder groups that companies commonly interact with while doing business. Each group has a part to play in your business success. Honesty and truth are the foundations for successful long-term relationships in business.

This is especially true in the early 21st century, when employees, customers and business partners can spread word quickly if you act with dishonesty. Along with telling the truth in your business relationships, openly disclosing important news, financial information and other data useful to your stakeholders is important to long-term success.

Workplace fairness starts with understanding your employees. Get to know each of them and become familiar with the conditions in which they are working. Knowing the context in which employees are coming to work every day will help keep your relationships with your employees on good terms.

Listening is one of the easiest ways to make your employees feel valued and promote fairness in the workplace. By knowing that you care about their opinions, your employees will feel important and respected. Be consistent in your listening. And, frequently, managers simply follow the all-too-human tendency to avoid uncomfortable situations. But the good news is that organizations can take concrete steps to promote greater process fairness. Many studies have shown that training programs make a big difference, and the author describes the most effective format.

In addition, warning your managers that they may experience negative emotions when practicing fair process will help prepare them to cope with those feelings. Finally, role modeling fair process on the executive level will help spread the practice throughout the organization.

The fact is, process fairness is the responsibility of all executives, at all levels and in all functions; it cannot be delegated to HR. The sooner managers realize that and work to make it a company norm, the better off the organization will be. When Company A had to downsize, it spent considerable amounts of money providing a safety net for its laid-off workers. The severance package consisted of many weeks of pay, extensive outplacement counseling, and the continuation of health insurance for up to one year.

But senior managers never explained to their staff why these layoffs were necessary or how they chose which jobs to eliminate. Even the people who kept their jobs were less than thrilled about the way things were handled.

Many of them heard the news while driving home on Friday and had to wait until Monday to learn that their jobs were secure. Nine months later, the company continued to sputter. Not only did it have to absorb enormous legal costs defending against wrongful termination suits, but it also had to make another round of layoffs, in large part because employee productivity and morale plummeted after the first round was mishandled.

But senior managers there explained the strategic purpose of the layoffs multiple times before they were implemented, and executives and middle managers alike made themselves available to answer questions and express regret both to those who lost their jobs and to those who remained.

Line managers worked with HR to tell people that their jobs were being eliminated, and they expressed genuine concern while doing so. As a result, virtually none of the laid-off employees filed a wrongful termination lawsuit. Workers took some time to adjust to the loss of their former colleagues, but they understood why the layoffs had happened. Although Company A spent much more money during its restructuring, Company B exhibited much greater process fairness.

In other words, employees at Company B believed that they had been treated justly. From minimizing costs to strengthening performance, process fairness pays enormous dividends in a wide variety of organizational and people-related challenges. Process fairness is more likely to generate support for a new strategy, for instance, and to foster a culture that promotes innovation. In short, fair process makes great business sense.

This article examines that paradox and offers advice on how to promote greater process fairness in your organization. Ultimately, each employee decides for him or herself whether a decision has been made fairly. But broadly speaking, there are three drivers of process fairness. One is how much input employees believe they have in the decision-making process: Are their opinions requested and given serious consideration? Another is how employees believe decisions are made and implemented: Are they consistent?

Are they based on accurate information? Can mistakes be corrected? Are the personal biases of the decision maker minimized? Is ample advance notice given? Is the decision process transparent? The third factor is how managers behave: Do they explain why a decision was made? Do they treat employees respectfully, actively listening to their concerns and empathizing with their points of view? Take the case of an individual who was passed over for a promotion.

When people feel hurt by their companies, they tend to retaliate. And when they do, it can have grave consequences. In , medical researcher Wendy Levinson and her colleagues found that patients typically do not sue their doctors for malpractice simply because they believe that they received poor medical care. Doctors who fail to do so are far more likely to be slapped with malpractice suits when problems arise. In addition to reducing legal costs, fair process cuts down on employee theft and turnover.

A study by management and human resources professor Greenberg examined how pay cuts were handled at two manufacturing plants. He very briefly explained why, thanked employees, and answered a few questions—the whole thing was over in 15 minutes.



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