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The opportunities for leadership to offer fair and equitable treatment to the people they lead within their organizations is rich, open to offer on a daily basis. But, does the average leader take the opportunity to focus on fairness? Or are they so focused on achieving the task within their business units they only look at who can get the job done in a timely manner?

What each person deems fair in the performance of their jobs is interpreted differently depending on the perspective of who is viewing the situation, what is at stake, what the outcome would be, what benefit is gained or lost, and so on.

The obvious focus of fairness within organizations is related to compensation, perks related to performing the job, and organizational hierarchy in position and status. One other area that has as much influence on perceived fairness is in social relationships. Social outcomes are valued as highly as monetary.

The happiness level increases in people who believe they are being treated fairly as their brains’ reward center is actively engaged and infusing the brain with the feel good neurotransmitter, dopamine.

When people perceive they are receiving fair and equitable treatment, they are less likely to reject offers of smaller value or requests from others, are more likely to accept offers of smaller value or less appealing assignments and tend to sustain a fairly happy demeanor, exclusive of other variables influencing the situation, such as gender or attractiveness. Neuroscience research shows that women, who are able to ‘see’ the person making offers of less value to them, are more tolerant in accepting the less valued offers. Women who were not able to see the person making the offers showed increased rejections of those offers. Men who were given visual cues of sexually appealing images prior to the offers, were then found to be more impulsive and accepted offers of smaller value sooner, rather than refraining and accepting offers of greater value farther into the future. The influence of sexually appealing cues increased acceptance of unfair offers by the men in the study. Attractiveness does influence the acceptance of more unfair offers.

The research also notes that fairness is associated with trust and will change with mood. People in poor states of mind, a bad mood, will be less tolerant to unfair treatment and are more likely to engage in behavior associated with threat as their limbic systems, specifically their amygdala’s’ will be engaged, increasing emotional arousal with the release of stress hormones. People forced to regulate their emotions because of perceived inequity will have access to less brain resources to work effectively, lose attention to doing great work, and will require mediation to quiet their emotional state of mind. They’ll be more focused on revenge as they weren’t given the opportunity, the raise, the primo assignment, kudos for a job well done and will likely be in a state of non-productive limbo trying to understand ‘why’ it didn’t happen as they expected. Our brains are deeply influenced by inequity aversion. People will move to automatic response in the face of being treated unfairly. How does this show up in organizations?

Human resources departments all over the country are dealing with employee issues totally focused on being treated unfairly. How many grievances stemming from inequitable treatment have been filed in organizations with unions? How many employee relations specialists are working around the clock because of perceived inequity in employee treatment? How many strikes have been initiated because of perceived inequity? How many talented, high performing employees have left organizations on the principle of inequity and fairness? How much money has been lost, production reduced, and fines paid in court and settlements made simply because of inequity in the form of unfair treatment of employees in organizations?

Lessons to learn from understanding fair and inequitable treatment – In the absence of fair treatment, people seek to be compensated through litigation, grievances, and other means of being validated, seen or recognized as a company’s best resource?. Leaders in organizations would have greater success and would actually reduce costs if they would proactively treat people fairly. Unjust treatment activates disgust reactions in the brain. Trust, cooperation, and fairness activate the reward centers of our brains. Create the conditions for fair treatment in how you handle job assignments, reward and recognition strategies, and determine fair criteria for promoting qualified people. Greater attention to fairness and communicating clearly without assuming something is fair will activate reward regions in the collective minds of the people in your organizations, even when there is no additional monetary gain!

If given a choice, research in the field of neuroscience shows that people are willing to bet on risky outcomes over ambiguous ones. The lack of uncertainty prevents people from stepping into situations that hold unclear outcomes; therefore, people demonstrate ‘away’ behavior such as retreat or withdrawal to move to a place of safety and security. The ‘knowing’ or awareness of some details in a risky situation is enough of a factor to influence ‘toward’ behavior. Given that leaders are responsible for leading change or working on a myriad of projects that don’t always have a clear-cut path to a desired outcome; leaders create situations fraught with risk and ambiguity.
Simply by giving people choice in situations that are risky will increase the likelihood of action in the direction of accomplishing the change or meeting the requirements of the project. Choice, offers a sense of autonomy which leads to a feeling of reward…a feeling of control in their destiny enables people to feel more at ease in the accomplishment of tasks in their organizations and therefore stimulate the reward center of their brain’s to initiate ‘toward’ or welcoming behavior.
Every organization is faced with developing strategies to effectively deal with a changing economy. I read an article in the Wall Street Journal that talked about research that had been conducted over an 18-year period on organizations that laid people off and organizations that selectively cut costs, but did not make drastic lay-offs during a prior recession. The long-term effects of organizations that over reacted to the down turn in the economy by drastically cutting staff with lay-offs suffered for the next ten years. They experienced minimal profits and growth as they could not rebound from the loss of talent and they struggled with efforts to hire replacement staff to make up for the loss of talent. Former workers, potential talent who had experienced the imposed changes of being streamlined with a pink slip, weren’t as eager to rejoin an organization that left them out in the cold…a bitter pill of uncertainty and very real threat to their survival! They voted with their feet and joined other organizations that provided some sense of certainty for their futures.
The organizations that demonstrated a level headed approach to keep their talent and avoid drastic moves, tended to reap greater rewards during the same period after the down turn. These organizations experienced abundant growth in profits, as they were able to keep up with the trends of economical growth without missing a beat while putting in play their long-term strategies. They had retained their talent and were able to adjust quickly and seamlessly to the increased customer demands and product development requirements.
The lack of certainty among staff within organizations demonstrated by the leadership in these organizations that made drastic moves in staff adjustments, created chaos and threatened the very people who made up their organizations; it put people in a heightened state of fear and discomfort. There was no autonomy and most certainly gross uncertainty. The sense of certainty offered in the other organizations, gave them a feeling of autonomy through the challenging times and helped them to effectively handle the challenges associated with the recession.
Leadership has a responsibility to reduce or eliminate the ambiguity within their organizations by providing tactical and strategic plans, goals, and vision for how they will continue to stay in business. Communicating that there is ‘risk’ in how the organizational leadership will deal with a downturn still provides a sense of hope for people. A realistic portrayal of the business status communicated to the staff will generate greater buy in and ownership for the transition and outcomes, not forced compliance in darkness of not knowing and a perceived sinking of the ship. Leadership has a responsibility to communicate truth, often and consistently. Being transparent provides needed certainty, even if the news is less than ideal. How informed are your people and what will you do to lessen the burden of uncertainty and increase autonomy in your organization?