– I’ve been studying
fairness in the workplace for about 30 years now
and at most basic level what I’m interested in is
why do people feel fairly or unfairly treated and
what are the consequences both positive and negative
of feeling that way? And I’ve come to believe
that fairness is maybe the most unappreciated construct in business. So what I wanna do today
is give you a sense of why fairness matters and
how powerful it can be. So there’s been some recent
research that suggests a concern for fairness
as an aid and it serves and evolutionary purpose
so what I’d like to do is start by talking about how fundamental a concern for fairness is. I wanna talk about some
work that’s been done at Emery University
that looks at Capuchins, cucumbers and concord grapes. And what the researchers
did is they trained monkeys to work for food and so
they’d give the monkeys a pile of granite pebbles
and when the monkey would return, would give the
pebble to the experimenter, they would get a piece of
food and after training, the monkeys were really
reliable at doing this task. Over 95% of the time, they
will give the researcher a pebble in exchange for food. And then the researchers
decided to mix things up. They take two monkeys and
they put them in cages side by side and when the first
monkey returns the pebble, she gets a cucumber, when
the second monkey returns the pebble, she gets a grape. Now apparently if you’re
a capuchin monkey, a grape is a much better
reward than a cucumber. And the monkeys know this and
the first monkey is not happy. They’re both doing the same
work and yet one is getting a much better deal than the
other so something happens. And the first monkey
changes her performance. Rather than returning the
pebble about 95% of the time. She’s only willing to do it about 60%. Some of the time, she just
simply goes on strike. She refuses a cucumber and
she refuses to give back that pebble and sometimes she’s
so angry she takes that cucumber and she throws it
back at the researchers. Because monkeys know
it’s not fair to get paid differently for doing the same work. And monkeys refuse to
be taken advantage of. So why did the monkeys
respond so strongly to this? Well, it appears that the
principles that underlay fairness like getting equal rewards
for equal contributions facilitate cooperation and
if you’re a social animal, cooperation is critical to survival. Now humans aren’t monkeys
but humans are in fact, social animals and fairness is a fundamental concern for humans as well. Fairness tells us about whether
we can trust other people, whether we should cooperate
with them, whether we should work together and for humans,
fairness also tells us about our standing in the
group, that is are we valued, do we belong, and like
cooperation for social animals, belonging is critical to survival. Of course, humans are much more
sophisticated than monkeys. And the way that they think
about fairness and how they react to it, that’s much
more sophisticated as well. So I wanna talk about two of
these important differences and how they have implications
for fairness at work. So in the experiment that
I just described about with the monkeys, we were talking
about something that my colleagues and I refer to
as distributive fairness, that is how fair was the
allocation of rewards? Were the rewards distributed fairly? People certainly care
about distributive fairness but they also care about
something my colleagues and I refer to as procedural fairness,
that is they care about how fair the procedure by
which the allocation of rewards were distributed was made. They care about the
fairness of the procedure. People also care about
something that I’m gonna refer to as interpersonal fairness
and that is they care about how fairly treated they were during that decision making process. So whereas monkeys only care
about the fairness of the distribution, people care
about the fairness of the procedure and the fairness
of their treatment during the enactment of that procedure. So let me talk a little
bit about procedural and interpersonal fairness. In the last 30 years,
we’ve learned a lot about the principles that underlay
people’s perceptions of procedural and interpersonal fairness. And these are really
very basic principles. I don’t think they’re gonna
surprise anybody in this room. People think procedures are
more fair when their opinion is solicited, when the
decision is based on accurate information, when procedures
are applied consistently across people, when the
decision maker is unbiased and when if they think
the decision was wrong, there’s a mechanism for
appealing that decision. The principles that underlay
interpersonal fairness are similarly basic, people
think that interpersonal treatment is more fair when
they’re treated with dignity and respect and when they’re provided reasonable and
timely explanations. But here’s the cool thing
about studying fairness in organizations, most
people think that what drives people’s reactions in
organizations is the things that they get from them, things like pay and promotion and bonuses. And those things are certainly important. But what our research
demonstrates is that procedural and interpersonal fairness
are often more important than what you actually
get from the organization. In fact, one of the most
consistent findings in this area is that even when people
get a bad outcome, when they get a decision that’s unfavorable,
they’re more satisfied with that decision and they’re
more willing to accept it if they think that the process
by which the decision was made was fair and if they’re
treated interpersonally fairly during that
decision making process. So what’s interesting about
that from a managerial perspective is that a lot
of times, I can’t give people exactly what they want. Not everyone gets the pay raise
that they think they deserve or the promotion that they
hope for or that the budget that they requested and then sometimes I have to lay people off. Sometimes I’m not even the
person who decides who gets what. But if the process by which
the decision was made was fair and if people think they were
treated fairly during that process, they’re more
satisfied with that decision and they’re more
accepting of the decision. And as a result, they’re
more willing to continue to work well in the organization. As a manager, I can typically
control the attributes of fair procedures and fair
interpersonal treatment. So let me give you an example of procedure and interpersonal fairness in action. This is some work that was
done by one of my colleagues Tom Tyler who is now at
Yale University Law School. And Tyler worked with New
York City Police Department to train their officers
to be more procedural and interpersonally fair when it comes to traffic violations. What Tyler found is that when
officers had been trained in the fairness principles
that we’ve been talking about, citizens were more
satisfied with the police even if they got a ticket. Now here’s the part
that’s most interesting. After interacting with an
officer who’d been trained to be more procedurally
and interpersonally fair, when people got tickets,
they were more satisfied with the police, more supportive of the police and overall had more positive
attitudes about the police than if they had never been pulled over. So I want you to think
about that for a minute. One of the most negative
things that can happen to you as a driver, you get pulled
over and you get a ticket actually leads to more
positive attitudes than if you’d never had that encounter. That’s why procedural
fairness is so interesting. So I wanna give you an
idea of the kinds of things in organizations that
procedural and interpersonal fairness influence and
this is just a sampling. This isn’t everything that’s been studied. What I’ve done here is I’ve taken the data and we’re gonna look at
what happens when you get a one point increase
on a seven point scale, how that influences
attitudes and behaviors. So this is basically
from going from neutral to slightly fair, slightly fair
to fair, fair to very fair. You get the idea and what
I think you’ll see is that what’s a pretty small change
in perception can have a pretty large impact on outcomes. So it’s not gonna surprise
you given what we’ve been talking about that there are
some very positive things associated with feeling
more fairly treated. So a one point increase
in perceptions of fairness is associated with about a
10% increase in performance. People are also more
satisfied, they’re more likely to help they’re employees and they tend to be absent less often. It’s probably also not gonna surprise you that there are some
negative effects associated with feeling less fairly treated. So here we’re gonna talk
about a one point decrease in fairness so going from
neutral to slightly unfair, slightly unfair to unfair,
unfair to very unfair, etc. So some colleagues and I
have done some work looking at things like sabotage
and vandalism and theft. And what we find is that
about a one point decrease in fairness is associated
with about a 20% increase in this kind of negative behavior. I think of this as the employee
throwing back the cucumber. But here’s the thing about
throwing back the cucumber. Sometimes you miss your target
and in fact, in our study what we found is that
about 80% of the time, when people were trying to
target a supervisor that they thought treated them unfairly,
they hit somebody else. Typically they hit
customers and sometimes they hit the organization more broadly. We also know there’s something
called a trickle down effect in organizations and
that is that when employees feel unfairly treated, that
trickles down and influences how they treat customers so a
one point decrease in fairness is associated with customers
reporting about a 6% decrease in customer satisfaction. Now the influence of fairness
goes beyond things that are sort of immediately in
the sphere of the organization or the workplace and it
influences people, things like people’s mental health
and their physical health so you can see that this one
point decrease in fairness is associated with a
decrease in mental health, an increase in stress and
burnout, sleep problems, health problems, things
like coronary heart disease and even cardiovascular death. These things have important
impacts on people, on the employees and it
also has some financial costs for organizations and
one of the things that I think may be most sobering is that
we also see that unfairness at work spills over into
your family life as well. So people who describe
themselves as being treated unfairly at work have
families who describe their family life as being more
tense, higher levels of conflict and greater levels of aggression. So across a really broad
range of outcomes, you can see that procedural and
interpersonal fairness matter. Now the second way that
fairness influences things in the workplace is on it’s
impact on observers. So unlike monkeys people care
about how other people are treated and they react to the
unfair treatment of others. So much like the research
on direct experience, there’s a broad range of attitudes and behaviors here that are influenced. I just wanna focus on a couple
to give you a sense for this. So there’s a series of studies
out of Columbia University that demonstrates that
how people are laid off influences the people who
don’t lose their jobs. There’s some work out of
Michigan State that shows that in teams, if a supervisor
treats one member unfairly, other members of the team
will retaliate against the supervisor and there’s some
research now in marketing that suggests that when
customers see employees being unfairly treated, they respond negatively. In fact, this research
suggests that when customers see a manager treat an
employee unfairly, they’re about 20% less likely to do business with that company in the future. I think of that as the customer
throwing back the cucumber. So we know there are these very
powerful effects of fairness in organizations and remember,
what I’m talking about here is not giving people huge raises, not that people wouldn’t like that. We’re talking about making
sure that the procedures by which decisions are made
and how people are treated during that decision
making process is fair. This really isn’t rocket science. These are really basic principles. Ask for people’s input,
treat people consistently, treat people with dignity and respect, provide explanations for the decision. These are things that
don’t cost a lot of money. And these are thing that
in a world where a lot of things you don’t control, these are things that you really typically can control. You can always control
how you treat somebody. But while these things
seem really intuitive and really straight
forward, in my own research, I find that about 15
to 20% of the employees don’t think they’re fairly
treated by their organization. And in some of my studies
that number is closer to 40%. So while everyone in this group
is probably doing it right, what those numbers
suggest is that some place in your organization someone
is likely dropping the ball. And if you think about the
consequences that we talked about earlier, that’s really sobering. So what strikes me is that
despite the fact that there’s this clear and profound impact
of fairness on employees and on customers and on
profits, in most companies, a focus on fairness isn’t
even on the radar screen. And for that, I think my
colleagues and I shoulder some of the blame, we’ve
been studying fairness for 30 years and we know
a lot about fairness. We know how to access it, we
know how to diagnose problems. We know how to train
people to be more fair and we know that that
training benefits employees and their companies but we
haven’t done a very good job of proactively disseminating information about the power of fairness. And so what I’m hoping is
that my talk today is one step towards remedying that failure
and gives you a sense of why fairness matters so thank
you very much and go Knights. (applause)