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Concept Version 11
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Fairness

Treating employees equitably enables substantial organizational benefits while avoiding unethical operations and the corresponding consequences.

Learning Objective

  • Understand the importance of an employee's perception of an organization's decisions, and the impact this can have on performance.


Key Points

    • From a common sense perspective, you tend to get what you give. Treating employees in a way that empowers a sense of fairness and equity is a critical component to motivating positive employee behaviors.
    • There are three useful frames of reference when considering organizational fairness: distributive justice, procedural justice, and interactional justice.
    • Distributive justice is simply the process of making sure an employee's production output aligns with his or her compensation.
    • Procedural justice focuses on allowing all participating employees to have input and accountability when designing operational processes.
    • Interactional justice comes in two parts. The first is ensuring that employees are treated in a socially positive and constructive manner. The second is ensuring nobody is left in the dark when important decisions are made.
    • Building the above concepts successfully into an organizational norm avoids productivity problems and empowers motivation, citizenship, and commitment.

Terms

  • Distributive

    Concerned with the way in which things are shared between people.

  • Procedural

    Concerned with the way in which something is done, or the process which enables it.

  • Interactional

    Concerned with the way in which one individual socially encounters another. 


Full Text

Why Fairness Adds Value

Equitable treatment of all employees and stakeholders is critical to organizational success and the proper execution of business ethics. Awareness of potential fairness pitfalls, and ensuring that all employees feel valued and equitably treated, can avoid a wide variety of ethical and operational problems, while maximizing employee performance through providing a healthy environment for people to flourish and grow.

Organizational Justice

To ensure an organization is fair, one must consider the concept of justice as a central pillar of what creates a fair environment (and what does not). The question is simple: how do employees perceive the behavior of the organization, and how does this impact both employee and organizational outcomes?

In answering these questions, there are three useful perspectives one can adopt in considering fairness in the organization:

  • Distributive - Simply put, the distribution of resources should align with the value of an individual's inputs. Of course, this is more complex than salary. As a manager, ensure that credit, bonuses, and benefits are also distributed fairly.
  • Procedural - Employees don't only want compensation. They also need input into the process, and shared accountability in the decisions being made. When designing the procedure of a given work group, inclusion of everyone's perspectives can lead to substantially higher satisfaction, efficiency, and fairness.
  • Interactional - All members of an organization must both be treated appropriately (from a social frame) and informed respectfully (from an informational frame). In short, employees should be treated with propriety in discussions and shouldn't be left in the dark when important decisions are made. 

Implications of Fairness

There are many overt and subtle outcomes of treating employees equitably. The simplest examples of positive results due to a strong sense of ethical fairness in an organization include:

  • Higher Performance and Efficiency - People feel their input is aligned with their compensation
  • Commitment - Happy employees tend to stick around.
  • Citizenship - If there is inequity in how people are treated, it tends to divide them. This is incredibly dangerous, and can quickly erode the positive benefits of looking out for one another.
  • Avoiding Counterproductive Behavior - In short, dissatisfied employees are more prone to working against the established goals of the organization. Behaviors such as not doing certain tasks or helping certain work-groups can quickly become a source of inefficiency.
  • Absenteeism - Sick days, skipping meetings, and generally unplugging from the organization is often an outcome of inequitable organizations.
  • Emotional Exhaustion - Unsatisfied employees wrestle with insecurity and dissatisfaction, both of which are emotionally draining.

While there are many more examples of consequences avoided and benefits achieved from an ethical operational approach, this paints a clear picture of why it is important and how to frame manager's perspectives to ensure equitable behavior.

Work Motivation

This model aligns well with Maslow's hierarchy of needs, but applied to workplace motivation. Through the five M's identified (in order of chronological achievement being Money; Myself; Member; Mastery; Mission), one can see how organizational justice will enable higher levels of individual motivation.

This model aligns well with Maslow's hierarchy of needs, but applied to workplace motivation. Through the five M's identified (in order of chronological achievement being Money; Myself; Member; Mastery; Mission), one can see how organizational justice will enable higher levels of individual motivation.
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