When companies treat employees fairly, everyone wins

At some point, you’ve probably worked in an environment where you felt you weren’t treated fairly – whether you were passed over for promotion without explanation, your input ignored or you didn’t feel valued.

Lack of fairness in the workplace creates implications far beyond the emotional well-being of employees. Studies show that when employees feel unfairly treated, they are less productive, more likely to engage in deceptive behavior and less likely to stay with the company long term.

Since the benefits of a fair workplace are widely known, why does unfair treatment of employees persist? Did your manager want you to feel that unfairly treated? Was s/he a “bad” manager or even person?

Elad Sherf, an organizational behavior professor at UNC Kenan-Flagler, and his co-authors Vijaya Venkataramani of the University of Maryland and Ravi S. Gajendran of Florida International University examined this question and share their findings in “Too busy to be fair? The effect of workload and rewards on managers’ justice rule adherence” in the Academy of Management Journal.

In the workplace, “justice” relates to managers’ specific actions or behaviors such as:

• Making decision-making transparent
• Providing employees with opportunities to provide input/feedback
• Acknowledging employees’ contributions
• Making time for employees to provide input on decisions when possible
• Treating employees with respect and dignity

When managers engage in such “justice behaviors,” employees are more likely to evaluate them as fair. Yet, these tasks take significant time and resources to accomplish – time and resources that are often in short supply for managers with heavy workloads.

Not just an individual problem

Previous research on fairness trying to explain why managers don’t engage in justice behaviors focused on managers’ individual attributes, such as personality traits or the perceived importance of fairness or morality.

Sherf and his colleagues took a different approach. They focused on how companies are organized and how much value they put on justice behaviors. Their core question: Is it is possible that managers who act unfairly are not “unfair people” but instead part of a larger system that prioritizes other elements over justice?

They found that the latter does seem to play an important role. As it turns out, a big barrier to workplace fairness is that managers typically neglect to engage in justice behaviors – not because they don’t care about fairness, but because they are overworked and not rewarded for justice tasks that contribute to a fair environment.

Workload, rewards and prioritization

Looking at fairness on a large-scale level, Sherf and his colleagues focused on structural organizational aspects that could affect workplace fairness.

• Workload: Many managers have too heavy of a workload and are forced to balance both justice tasks and other, technical tasks that support the company’s core functions. When under high demands and time pressure, justice tasks, on average, tended to be pushed aside more.
• Rewards: Companies explicitly and implicitly reward technical tasks over justice tasks. This permeates corporate rhetoric on many levels – from what is mentioned in job descriptions to promotions. When companies’ rewards systems emphasize technical tasks as more important than justice tasks, the latter tends to slip through the cracks more when workloads are higher.

The research team conducted three studies across a variety of industries (healthcare, media, transportation, finance, retail and education), locations (India and the U.S.) and positions (industry managers, employees and university students).

In their first study, a diverse sample of 107 U.S. based-managers rated their workload, prioritization of technical tasks, justice rule adherence and the extent to which their company rewarded justice behaviors. On days when their workload was heavy, managers reported engaging less in justice behaviors towards employees. However, when they perceived their company prioritized and rewarded justice tasks, heavy workload affected the prioritization of technical tasks less, and as a result, managers’ completion of justice tasks wasn’t affected as much.

Next, they paired managers with two of their employees from firms in India into 166 manager/employee groups. The managers filled out similar surveys to the first study (referring to the last three months, instead of the specific day), while the employees rated their managers’ justice behaviors (rather than the managers rating themselves, as in the first study). The findings in the second study were consistent with the first.

The third study used a simulation in which 249 undergrads worked for a hypothetical company. They all completed two tasks: one technical and one justice. However, they were randomly assigned to high vs. low workloads and low-justice rewards organization vs. balanced-rewards organizations. Predictably, the high-workload group neglected the justice task more often while focused on technical tasks. However, the workload effect was more severe for the low-justice rewards group, as opposed to the high-justice rewards group. This latter group completed their justice tasks without diminishing their performance on the technical task, despite the higher workload.

Sherf and his colleagues reached several conclusions.

• Workload, the prioritization of technical tasks and low-justice rewards play a defining role in whether managers engage in justice behaviors required for employees to feel fairly treated.
• Companies that produce a context of “high-workload low-justice rewards” for their managers create an environment in which managers tend to neglect justice behaviors more.
• If justice behaviors are seen as more important (even as equally important as technical tasks), managers can achieve similar task performance while also finding ways to devote time to justice behaviors.

A “how to” on fairness

“Fairness does not occur in a vacuum,” Sherf says. “Companies need to be aware of how their managers’ workloads and job descriptions – as well as the organizations’ systems of rewards –influence fairness.” This suggests shifting the focus from villainizing unfair or unjust managers to examining ways in which their organizational structures and incentives might make attention to justice tasks difficult for managers.

This research has implications for both upper-level management and for individual managers stuck in a system that they are unlikely to change entirely, but still want to create a mutually beneficial environment of fairness.

For lower-level managers:

• Be deliberate, but creative with your time. Think whether your time management approach affords time for justice tasks, not only technical ones.
• Ensure that you are anchoring time for justice in ways that are not easily prioritized in real-time. That is, don’t leave it to chance or to “if I will have the time.”

For upper-level managers:

• Adjust company policy to reward managers not only for technical tasks but also for engaging in behaviors more likely to elicit judgments of fairness by employees.
• Be explicit about the importance of justice tasks to managerial positions by including them in job descriptions and evaluations.
• Listen to managers and, when possible, provide the flexibility they need to order their workdays in ways that best allows them to complete both justice and technical tasks.

Companies like Google are recognizing that by prioritizing justice behaviors they can decrease turnover, increase productivity, and reap an array of other benefits. If firms adjust their organizational structures, routines and rewards systems in line with Sherf’s findings, we might just the see the beginning of an increased, global emphasis on structural fairness in the workplace.