Business Psychology - Latest Findings

Article No. 314
Supervision Findings, by James Larsen, Ph.D.

Fairness Rules

Research reveals new ways to influence employee perceptions of fairness.

One of the frustrations of business occurs when promising new employees quit. These are people with 3-4 months on the job who are working well and getting along fine. We have a lot invested in them and a lot of hope in them. Then one day, they�re gone, and we�re back to square one with an ad in the paper.

Elaine Hollensbe, from the University of Cincinnati, is interested in this problem, and she recently conducted a study hoping to learn ways we can reduce this unwanted turnover. She began by conducting in-depth interviews with 33 people who were beginning jobs with a variety of employers. Three to five months later, she interviewed them again. She explored the employees� perceptions of fairness and how they arrived at them. She knew that opinions about fairness are usually based on specific events such as pay raises, discipline, or performance reviews, and she knew that new employees do have opinions about the fairness of their supervisors and their employers. But what new employees don�t have is experience with specific fairness events. They form perceptions of fairness, and they make decisions about continuing their employment, but they arrive at their decisions without giving their employers a chance to do anything unfair following rules we don�t understand. Hollensbe sought to shed light on this thinking and discover the rules they follow. An analysis of her interview tapes gave her some surprising answers. She found that new employees look to several unexpected sources to arrive at fairness perceptions.

Hollensbe found that turnover was a fairness issue. Regardless of the reason for turnover, if employees tend to leave their jobs, then new-hires notice it and believe that fairness is the root cause. That is, if people move on, then it must be because the employer is unfair. Curiously, this thinking disappeared after new people had been on the job 3-5 months.

Support and flexibility were fairness issues. If supervisors allowed new employees some freedom in arranging and carrying out their work, then their perceptions of fairness improved. If supervisors were responsive in answering questions and providing direction, then perceptions of fairness were also improved.

Diversity was a fairness issue. If new-hires looked around and found a representative mix of ages, races, nationalities, and genders, then their perceptions of fairness improved. If they failed to see diversity, then their perceptions of fairness suffered.

�Inside information� was an important fairness source for new-hires. If people within a firm talked about unfair treatment, then new-hire perceptions of fairness declined. If the inside info was positive, then perceptions of fairness improved.

Finally, new-hires are influenced by how they feel. If they report feeling good, then their good feelings carry over to their perceptions of fairness. They believe their supervisor and their employer are fair simply because they feel good. Bad feelings also carry over and negatively impact perceptions of fairness. Curiously, this process significantly strengthened as time passed. Hollensbe found this rule for assessing fairness to be employed much more frequently during the second interviews when people had held their jobs for 3-5 months. Twenty-seven percent of the people she interviewed cited this rule for forming perceptions of fairness during their second interviews.

Most firms follow elaborate procedures to insure that employees are treated fairly, and it is frustrating when perceptions of unfairness persist in spite of them. You might say it is unfair, and Hollensbe has three suggestions to help us. First, she believes firms should reveal turnover statistics and diversity information to new-hires as they begin their jobs. Second, she feels managers should take some control of the inside information that is passed around in our firms. She suggests we create stories about fairness events and experiences within our businesses and foster their retelling among our employees. �Storytelling� during training and social events immediately comes to mind. Finally, she points out that good experiences often produce good feelings, and that we have considerable influence on creating good experiences for our employees. She cites allowing flexibility in arranging one�s work and support for new employees as examples.

Although improving perceptions of fairness should reduce unwanted turnover, it might also impact another group of employees: people who believe they are treated unfairly but decide to remain in their jobs. Unhappy people who feel unfairly treated often feel stuck, and they often engage in anti-social activities. They may be uncooperative and argumentative, steal from you, and abuse leave time. They may destroy equipment and supplies and poison the attitudes of new employees. They may also share their stories of unfair treatment in the community where they�ll spoil goodwill you�ve worked hard to create. Hollensbe calls attention to this group and points out that any efforts to improve perceptions of fairness will likely influence this group, too, and any reduction of their anti-social behavior would be welcome.

Reference: Hollensbe, Elaine, Shalini Khazanchi, and Suzanne Masterson (2008) How Do I Assess If My Supervisor and Organization Are Fair? Identifying the Rules Underlying Entity-Based Justice Perceptions. Academy of Management Journal, 51 (6), 1099-1116.

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