Tuesday, July 30, 2019
Hard to Be Fair
BEST PRACTICE Everyone knows that being fair costs little and pays off handsomely. Then why do so few executives manage to behave fairly, even though most want to? Why Itââ¬â¢s So Hard to Be Fair by Joel Brockner W hen Company A had to downsize,it spent considerable amounts of money providing a safety net for its laid-off workers. The severance package consisted of many weeks of pay, extensive outplacement counseling, and the continuation of health insurance for up to one year. But senior managers never explained to their staff why these layoffs were necessary or how they chose which jobs to eliminate.Whatââ¬â¢s more, the midlevel line managers who delivered the news to terminated employees did so awkwardly, mumbling a few perfunctory words about ââ¬Å"not wanting to do thisâ⬠and then handing them off to the human resources department. Even the people who kept their jobs were less than thrilled about the way things were handled. Many of them heard the news while driving home on Friday and had to wait until Monday to learn that their jobs were secure. Nine months later, the company continued to sputter.Not only did it have to absorb enormous legal costs defending against wrongful termination suits, but it also had to make another round of layoffs, in large part because employee productivity and morale plummeted after the ? rst round was mishandled. When Company B downsized, by contrast, it didnââ¬â¢t offer nearly as generous a severance package. But senior managers there explained the strategic purpose of the layoffs multiple times before they were implemented, and executives and middle managers alike made themselves available to answer questions and express regret both to those who lost their jobs and to those who remained.Line managers worked with HR to tell people that their jobs were being eliminated, and they exharvard business review 122 pressed genuine concern while doing so. As a result, virtually none of the laid-off employees ? led a wr ongful termination lawsuit. Workers took some time to adjust to the loss of their former colleagues, but they understood why the layoffs had happened. And within nine months, Company Bââ¬â¢s performance was better than it had been before the layoffs occurred.Although Company A spent much more money during its restructuring, Company B exhibited much greater process fairness. In other words, employees at Company B believed that they had been treated justly. From minimizing costs to strengthening performance, process fairness pays enormous dividends in a wide variety of organizational and people-related challenges. Studies show that when managers practice process fairness, their employees march 2006 respond in ways that bolster the organizationââ¬â¢s bottom line both directly and indirectly.Process fairness is more likely to generate support for a new strategy, for instance, and to foster a culture that promotes innovation. Whatââ¬â¢s more, it costs little ? nancially to imple ment. In short, fair process makes great business sense. So why donââ¬â¢t more companies practice it consistently? This article examines that paradox and offers advice on how to promote greater process fairness in your organization. The Business Case for Fair Process Ultimately, each employee decides for him or herself whether a decision has been made fairly.But broadly speaking, there are three drivers of process fairness. One is how much input employees believe they have in the decision- making process: Are their opinions requested and given serious consideration? Another is how employees believe decisions are made and implemented: Are they consistent? Are they based on accurate information? Can mistakes be corrected? Are the personal biases of the decision maker minimized? Is ample advance notice given? Is the decision process transparent? The third factor is how managers behave: Do they explain why a decision was made?Do they treat employees respectfully, actively listening t o their concerns and empathizing with their points of view? Itââ¬â¢s worth noting that process fairness is distinct from outcome fairness, which refers to employeesââ¬â¢ judgments of the bottom-line results of their exchanges with their employers. Process fairness doesnââ¬â¢t ensure that employees will always get what they want; but it does 123 OLEG DERGACHOV B E S T P R A C T I C E â⬠¢ W h y I tââ¬â¢s S o H a rd t o B e Fa i r mean that they will have a chance to be heard.Take the case of an individual who was passed over for a promotion. If he believes that the chosen candidate was quali? ed, and if his manager has had a candid discussion with him about how he can be better prepared for the next opportunity, chances are heââ¬â¢ll be a lot more productive and engaged than if he believes the person who got the job was the bossââ¬â¢s pet, or if he received no guidance on how to move forward. When people feel hurt by their companies, they tend to retaliate. And w hen they do, it can have grave consequences.A study of nearly 1,000 people in the mid-1990s, led by Dukeââ¬â¢s Allan Lind and Ohio Stateââ¬â¢s Jerald Greenberg, found that a major determinant of whether employees sue for wrongful termination is their perception of how fairly the termination process was carried out. Only 1% of ex-employees who felt that they were treated with a high degree of process fairness ? led a wrongful termination lawsuit versus 17% of those who believed they were treated with a low degree of process fairness. To put that in monetary terms, the expected cost savings of practicing process fairness is $1. 8 million for every 100 employees dismissed. That ? gureââ¬âwhich was calculated using the 1988 rate of $80,000 as the cost of legal defense ââ¬â is a conservative estimate, since in? ation alone has caused legal fees to swell to more than $120,000 today. So, although we canââ¬â¢t calculate the precise ? nancial cost of practicing fair process, itââ¬â¢s safe to say that expressing genuine concern and treating dismissed employees with dignity is a good deal more affordable than not doing so. Customers, too, are less likely to ? le suit against a service provider if they believe theyââ¬â¢ve been treated with process fairness.In 1997, medical researcher Wendy Levinson and her colleagues found that patients typically do not sue their doctors for malpractice simply Joel Brockner ([emailà protected] edu) is the Phillip Hettleman Professor of Business at Columbia Business School in New York. 124 because they believe that they received poor medical care. A more telling factor is whether the doctor took the time to explain the treatment plan and to answer the patientââ¬â¢s questions with consideration ââ¬â in short, to treat patients with process fairness.Doctors who fail to do so are far more likely to be slapped with malpractice suits when problems arise. In addition to reducing legal costs, fair process cuts down on employee theft and turnover. A study by management and human resources professor Greenberg examined how pay cuts were Using process fairness, companies could spend a lot less money and still have more satis? ed employees. handled at two manufacturing plants. At one, a vice president called a meeting at the end of the workweek and announced that the company would implement a 15% pay cut, across the board, for ten weeks.He very brie? y explained why, thanked employees, and answered a few questions ââ¬â the whole thing was over in 15 minutes. The other plant implemented an identical pay cut, but the company president made the announcement to the employees. He told them that other cost-saving options, like layoffs, had been considered but that the pay cuts seemed to be the least unpalatable choice. The president took an hour and a half to address employeesââ¬â¢ questions and concerns, and he repeatedly expressed regret about having to take this step.Greenberg found that durin g the ten-week period, employee theft was nearly 80% lower at the second plant than at the ? rst, and employees were 15 times less likely to resign. Many executives turn to money ? rst to solve problems. But my research shows that companies can reduce ex- penses by routinely practicing process fairness. Think about it: Asking employees for their opinions on a new initiative or explaining to someone why youââ¬â¢re giving a choice assignment to her colleague doesnââ¬â¢t cost much money. Of course, companies should continue to offer tangible assistance to employees as well.Using process fairness, however, companies could spend a lot less money and still have more satis? ed employees. Consider the ? nancial fallout that occurs when expatriates leave their overseas assignments prematurely. Conventional wisdom says that expats are more likely to leave early when they or their family members donââ¬â¢t adjust well to their new living conditions. So companies often go to great expen se to facilitate their adjustment ââ¬â picking up the tab for housing costs, childrenââ¬â¢s schooling, and the like.In a 2000 study of 128 expatriates, human resources consultant Ron Garonzik, Rutgers Business School professor Phyllis Siegel, and I found that the expatsââ¬â¢ adjustment to various aspects of their lives outside work had no effect on their intentions to depart prematurely if they believed that their bosses generally treated them fairly. In other words, high process fairness induced expats to stick with an overseas assignment even when they were not particularly enthralled with living abroad. In a similar vein, some companies have devised expensive solutions to help employees cope with the stress of modern work.Theyââ¬â¢ve set up on-site day care centers and sponsored stress management workshops to help reduce absenteeism and burnout. Those efforts are laudable, but process fairness is also an effective strategy. When Phyllis Siegel and I surveyed nearly 3 00 employees from dozens of organizations, we found that work/life con? ict had no measurable effect on employeesââ¬â¢ commitmentââ¬â as long as they felt that senior executives provided good reasons for their decisions and treated them with dignity and respect. Of course, executives should not simply emphasize process fairness over tanharvard business reviewW h y I tââ¬â¢s S o H a rd t o B e Fa i r â⬠¢ B E S T P R A C T I C E gible support. Determining exactly how much tangible support to provide is perhaps best captured by the law of diminishing returns. Beyond a moderate level of ? nancial assistance, practicing process fairness proves much more cost effective because, although money does talk, it doesnââ¬â¢t say it all. Fair Process as a Performance Booster Process fairness can not only minimize costs but can also help to increase value, inspiring operational managers to carry out a well-founded strategic plan eagerly or embrace, rather than sabotage, an organiz ational change.This form of value is less tangible than direct reduction of expenses, but it affects the bottom line nonetheless. The fact is, most strategic and organizational change initiatives fail in their implementation, not in their conception. Several years ago, I worked with the CEO of a ? nancial services institution that needed a major restructuring. The bankââ¬â¢s operational managers, however, were showing signs of resistance that threatened to stop the process dead in its tracks. I advised the CEO and his senior management team to conduct several town hallââ¬âtype meetings and to hold informal focus groups with the operational managers.During those senior managers to respond to the root problem. Moreover, since the operational managers felt respected, they showed a similar level of process fairness with their direct reports during the actual restructuring, making the change go more smoothly. Michael Beer, of Harvard Business School, and Russell Eisenstat, preside nt of the Center for Organizational Fitness, recently provided evidence of how systematically practiced process fairness (embedded in an action-learning egy implementation as well as the shortcomings that could hinder it.Task force members distill the information they gain from these interviews into major themes and feed them back to senior management. Then they discuss how the strategy could be rolled out most effectively. SFP is a model for process fairness: More than 25 companies ââ¬â including Becton, Dickinson; Honeywell; JPMorgan Chase; Hewlett-Packard; and Merck ââ¬â have used it with great success to hone the substance of their strategic initiatives and, probably more important, to gain employeesââ¬â¢ commitment to making those initiatives happen.Most companies say that they want to promote creativity and innovation, but few use process fairness to achieve those ends. Theyââ¬â¢re missing out on a great opportunity to create value. Harvard Business School profes sor Teresa Amabile has conducted extensive research on employees working in creative endeavors in order to understand how work environments foster or impede creativity and innovation. She has consistently found that work environments in which employees have a high degree of operational autonomy lead to the highest degree of creativity and innovation.Operational autonomy, of course, can be seen as the extreme version of process fairness. When employees feel that they are heard in the decision-making process, they are more likely to supportââ¬ârather than merely comply withââ¬â those decisions, their bosses, and the organization as a whole. talks, it became clear that the managers felt that the CEO and senior executives failed to appreciate the magnitude of the change they were asking for. Interestingly, the managers didnââ¬â¢t request additional resources; they simply wanted those at the top to recognize their dif? ult plight. By expressing authentic interest, senior execu tives created a trusting environment in which managers felt they could safely voice their true objections to the change effort. That enabled march 2006 methodology known as the strategic ? tness process, or SFP) has helped numerous organizations capture value by getting employees to buy in to strategies. A critical element of SFP is the appointment of a task force consisting of eight well-respected managers from one or two levels below senior management.Their job is to interview roughly 100 employees from different parts of the company to learn about the organizational strengths that are apt to facilitate strat- The nature of organizations, though, means that few (if any) employees can have complete operational autonomy ââ¬â just about everyone has a boss. Creativity and innovation tend to suffer in work environments characterized by low levels of process fairness, such as when employees believe that the organization is strictly controlled by upper management or when they believ e that their ideas will be summarily dismissed. When employees believe that 125B E S T P R A C T I C E â⬠¢ W h y I tââ¬â¢s S o H a rd t o B e Fa i r their supervisor is open to new ideas and that he or she values their contributions to projects, however, creativity and innovation are more likely to ? ourish. Two examples illustrate how process fairness creates value by attracting innovative employees or additional customers. The CEO of a renowned electricalengineering ? rm, for instance, wanted to change the corporate culture to be more receptive to new ideas, so he separated a large group of workers into teams of ten, asking each team to come up with ten ideas for improving the business.Then the team leaders were brought into a room where the companyââ¬â¢s executives were gathered and were asked to ââ¬Å"sellâ⬠as many of their teamââ¬â¢s ideas as possible. The executives, for their part, had been instructed to ââ¬Å"buyâ⬠as many ideas as possible. The team leaders swarmed like bees to honey to the few executives who had reputations for being good listeners and open to new ideas. The other executives stood by idly because team leaders assumed from past experience that they wouldnââ¬â¢t listen. One company that used process fairness to create value is Progressive Casualty Insurance.In 1994, the ? rm began to give potential customers comparison rates from two competitors along with its own quotes for auto insurance. Even though Progressiveââ¬â¢s rates werenââ¬â¢t always the lowest, the very act of delivering this information created goodwill. Potential customers felt that they were being treated honestly, and the practice drew many new sales. servant, Winston S. Churchill. â⬠After being castigated by his countrymen for the letterââ¬â¢s deferential tone, Churchill is said to have retorted, ââ¬Å"When you have to kill a man, it costs nothing to be polite. In a change management seminar Iââ¬â¢ve taught to more than 40 0 managers, I ask participants to rate themselves on how well they plan and implement organizational change. I also ask the managersââ¬â¢ bosses, peers, direct reports, and customers to rate them. The measure ers were ââ¬Å"lucky enough to still have their jobs. â⬠But economically supporting those who lost their jobs doesnââ¬â¢t cancel out the need to show process fairness to those affected by the changeââ¬âwhich, incidentally, includes everyone.Ironically, the fact that process fairness is relatively inexpensive ? nancially may be why this numbers-oriented executive undervalued it. Another reason process fairness may be overlooked is because some of its bene? ts arenââ¬â¢t obvious to executives. Instead of wrestling with uncomfortable emotions, many managers ? nd it easier to sidestep the issueââ¬â and the people affected by itââ¬âaltogether. contains more than 30 items, and managers consistently give themselves the highest marks on the item that measure s process fairness: ââ¬Å"When managing change, I ake extra efforts to treat people with dignity and respect. â⬠Those rating them, however, are not nearly as positive. In fact, this is the only item in which managersââ¬â¢ self-assessments are signi? cantly higher than the ratings they receive from each of their groups. Itââ¬â¢s not entirely clear why this perceptual gap exists. Perhaps managers are tuned in to their intentions to treat others respectfully, but they arenââ¬â¢t as good at reading how those intentions come across to others. Or maybe itââ¬â¢s just wishful ââ¬â and self-serving ââ¬â thinking.Some managers wrongly believe that tangible resources are always more meaningful to employees than being treated decently. At a cocktail party, the CEO of a major international bank proudly told me about the hefty severance pay his company gave to its laid-off employees. I expressed admiration for his organizationââ¬â¢s show of concern toward the people who lost their jobs and then asked what had been done for those who remained. Somewhat defensively, he said that it was only necessary to do something for the employees who were ââ¬Å"affectedâ⬠by the layoffs.The othSocial psychologist Marko Elovainio of the University of Helsinki and his colleagues recently conducted a study of more than 31,000 Finnish employees, examining the relationship between employeesââ¬â¢ negative life events (such as the onset of a severe illness or death of a spouse) and the frequency of sicknessrelated absences from work for the subsequent 30 months. The study showed that the tendency for negative life events to translate into sickness-related absences depended on how much process fairness employees experienced before the events occurred.That is, not being pretreated with process fairness led to absences waiting to happen. Sometimes corporate policies hinder fair process. The legal department may discourage managers from explaining their decisio ns, for instance, on the grounds that disclosure of information could make the company vulnerable to lawsuits. Better not to say anything at all, the thinking goes, than to risk having the information come back to haunt the organization in the courtroom. Clearly, legal considerations about what to communicate are important, but they should not be taken to unnecessary extremes.All too often organizations withhold information (such as the alternatives to downsizing that have harvard business review Why Isnââ¬â¢t Everybody Doing It? With all that process fairness has going for it, one might expect that executives would practice it regularly. Unfortunately, many (if not most) donââ¬â¢t. Theyââ¬â¢d do well to follow the example of Winston Churchill, who keenly understood the cost-effectiveness of process fairness. On the day after the bombing of Pearl Harbor, Churchill wrote a declaration of war to the Japanese, ending it as follows: ââ¬Å"I have the honour to be, with high con sideration, Sir, Your obedient 126W h y I tââ¬â¢s S o H a rd t o B e Fa i r â⬠¢ B E S T P R A C T I C E been considered) when revealing it would have done far more good. Legal and medical advocates in Hawaii, for instance, are currently drafting a statute that would allow health care professionals to apologize for medical errors without increasing the risk of lawsuits. Doctors often refrain from apologizing for mistakes because they fear that admitting them will anger their patients, who will then be more likely to ? le malpractice suits. In fact, the opposite is true: Patients who feel theyââ¬â¢ve been treated disrespectfully ? e more malpractice suits than those who feel they have been treated with dignity. By making apologies for medical mistakes inadmissible during a trial, the law would let doctors express regrets without worrying that doing so would hurt them in court. Managers who unwaveringly believe that knowledge is power may fear that engaging in process fairnes s will weaken their power. After all, if employees have a voice in deciding how things should be run, who needs a manager? Managers sometimes do run the risk of losing power when they involve others in decision making.But usually the practice of process fairness increases power and in? uence. When employees feel that they are heard in the decision-making process, they are more likely to supportââ¬â rather than merely comply with ââ¬â those decisions, their bosses, and the organization as a whole. The desire to avoid uncomfortable situations is another reason managers fail to practice process fairness. As Robert Folger of the University of Central Florida has suggested, managers who plan and implement tough decisions often experience con? icting emotions. They might want to approach the affected parties out of sympathy and to explain the hinking behind a decision, but the desire to avoid them is also strong. Andy Molinsky at Brandeis University and Harvard Business Schoolâ⠬â¢s Joshua Margolis analyzed why managers ? nd it so hard to perform necessary evils (such as laying off employees and delivering other bad news) with interpersonal sensitivity, which is an important element of process fairness. Leaders in this situation have to manage their own internal dramas, including feelings of guilt (for, say, making poor strategic decisions that led to the downsizing) and anxiety (about having suf? ient interpersonal sensitivity to accomplish the task gracefully). Instead of wrestling with those uncomfortable emotions, many managers ? nd it easier to sidestep the issueââ¬âand the people affected by itââ¬â altogether. ââ¬Å"Emotional contagionâ⬠also comes into play in these situations. Just as we tend to laugh when we see others laugh, even when we donââ¬â¢t know why, we also involuntarily feel anxious or sad when those around us feel that way ââ¬â and thatââ¬â¢s uncomfortable. No wonder so many managers avoid people in emotional pa in. Unfortunately, such avoidance makes it very unlikely that they will practice process fairness.Breadth. Depth. Performance. Leadership. Tuck Executive Program July 22ââ¬âAugust 11 Leading high-potential and senior executives to new levels of business performance Gateway to Business Management April 30ââ¬âMay 5 & November 12-17 Delivering skills and perspective functional managers need for advancement Finance Essentials for Senior Managers September 10ââ¬â15 Offering greater accountability and transparency in your organization New Branding Imperatives May 7ââ¬â9 Presenting strategies for maximizing brand equity and competitive positioning www. tuck. dartmouth. edu/exec 603-646-2839 tuck. xec. [emailà protected] edu B E S T P R A C T I C E â⬠¢ W h y I tââ¬â¢s S o H a rd t o B e Fa i r I can understand how managers feel. Several years ago, I was working with a telecommunications organization after the ? rst layoffs in the companyââ¬â¢s history. The CEO an d his senior management team wanted me to talk to the midlevel managers about how the layoffs would affect the people who remained and what they could do to help their direct reports ââ¬Å"get over it. â⬠Feeling betrayed and fearful, however, the midlevel managers were in no mood to help others return to business as usual. They identi? d me with the problem and implied that I was partly responsible for the decision to downsize. That was a moment of real insight for me: Trying to counsel this unhappy and suspicious group, I completely understood the discomfort that managers experience when theyââ¬â¢re called on to act compassionately toward people who feel aggrieved. It was much harder than I expected. The senior managers of the company admitted to me that they were tempted to avoid the rank and ? le ââ¬â partly out of guilt and partly because they doubted whether they would be able to keep a cool enough head to practice process fairness.Thatââ¬â¢s a natural response , but ignoring negative emotions only keeps them swirling around longer. When senior managers made themselves more accessible to their workforce, employees reacted positively, and the organization developed a renewed sense of purpose. ter able to cope with (and hence not act on) their negative emotions. Furthermore, managers are more likely to endure a dif? cult process when they know that the effort will have a tangible payoff. But itââ¬â¢s not enough for managers to be vaguely aware that process fairness is cost effective. Corporate executives should educate them about all the ? nancial bene? ts, using charts and ? ures, just as they would when making a business case for other important organizational initiatives. Invest in training. Study after study has shown that fair-process training can make a big difference. Subordinates of the trained managers, for instance, are When I was working with an executive at a utility company several years ago, for example, I noticed that she m ade a common mistake: She didnââ¬â¢t tell others that she had seriously considered their opinions before making her decisions, even though she had. I advised her to preface her explanations by saying explicitly that she had ââ¬Å"given their input some serious thought. Six months later, she told me my advice had been priceless. She learned that itââ¬â¢s not enough for executives just to be fair, they also have to be seen as fair. Training is most effective when itââ¬â¢s delivered in several installments rather than all at once. For example, one suc- Itââ¬â¢s not enough for executives just to be fair; they also have to be seen as fair. Toward Process Fairness Companies can take several steps to make fair process the norm. Address the knowledge gaps. Managers need to be warned about the negative emotions they might experience when practicing fair process.Merely acknowledging that it is legitimate to feel like ? eeing the scene can help managers withstand the impulse to do so. Studies have shown that people can tolerate negative experiences more easily when they expect them. Just as forewarned surgical patients have been found to experience less postoperative pain, forewarned managers may be bet128 not only signi? cantly less likely to steal or to resign from the organization, but they are also more likely to go the extra mile ââ¬â aiding coworkers who have been absent, helping orient new employees, assisting supervisors with their duties, and working overtime.Several studies by Jerald Greenberg have even found that employees whose managers underwent process fairness training suffered signi? cantly less insomnia when coping with stressful work conditions. Daniel Skarlicki, of the University of British Columbiaââ¬â¢s Sauder School of Business, and Gary Latham, of the University of Torontoââ¬â¢s Joseph L. Rotman School of Management, have identi? ed some factors of an effective process fairness training program. Participants respond better to active guidance than to a lecture on the bene? ts of improved process fairness.Thatââ¬â¢s why itââ¬â¢s particularly effective to give trainees speci? c instructions on what they need to do and how they need to do it, such as how to detect resistance to a new strategic initiative. After the participants have practiced these behaviors, give them feedback and let them try again. cessful program consisted of a two-hour session each week for eight weeks, along with assigned role-playing homework. That way, participants could receive feedback from instructors during the formal training sessions and from their peers in between meetings.As with most constructive feedback, referring to behaviors (ââ¬Å"You never explained why you made this decisionâ⬠) rather than to traits (ââ¬Å"You came across as condescendingâ⬠) proved to be most compelling. Both the process and the outcome of the training need to be communicated to participants ââ¬â but not at the same time. Before the sessions begin, focus on the outcome. Participants are likely to be far more engaged if they are told that the program will help them gain their employeesââ¬â¢ commitment to strategy implementation than if they are told it will help them communicate that theyââ¬â¢ve seriously considered other peopleââ¬â¢s points of view.During the course, however, focus on process. Thinking about expected outcomes (improved strategy implementation, for instance) can distract people from learning the speci? c practical skills they need (such harvard business review as how to involve people in decision making) to achieve the desired results. Finally, it is important for trainees to maintain expectations that are both optimistic and realistic. Once again, the distinction between outcome and process is useful to keep in mind.You can generate optimism by focusing on the outcomes: Touting the improvements that previous trainees have made should help people feel positive about their own chanc es for growth. And you can inject realism by focusing on the process: Behavioral change is dif? cult and rarely takes a linear course. Trainees shouldnââ¬â¢t expect to get better at process fairness day by day; but, if they keep working at it, they will improve. I suggest trainees ask themselves three months after the program if they are practicing process fairness more on average than they were three months prior to it.Conducting after-action reviews also helps managers continue to hone their skills long after the training sessions are over. Make process fairness a top priority. Like most managerial behaviors, the practice of process fairness must begin at the top. When senior managers explain why they have made certain strategic decisions, make themselves available for honest two-way communication with the rank and ? le, involve employees in decision making, provide ample advance notice of change, and treat peopleââ¬â¢s concerns with respect, the practice of process fairness is likely to spread like wild? e throughout the rest of the organization. By modeling process fairness, senior management does more than communicate organizational values; it also sends a message about ââ¬Å"the art of the possible. â⬠People are more likely to try to tackle dif? cult challenges when they see others whom they respect doing so. In one company that was trying to implement a much-needed restructuring, senior executives effectively served as role models not only by describing the mixed feelings they had about practicing process fairness but also by articulating the process they went through that ultimately convinced them to do march 2006 o. The message they sent was that it was legitimate for operational managers to have mixed emotions, but, at the end of the day, the reasons in favor of practicing process fairness prevailed. In addition to acting as role models, senior managers may communicate the value they place on process fairness by making its practice a leg itimate topic of conversation throughout the organization. I worked with one company, for example, that selected its employee of the month based on process fairness skills as well as bottom-line results.Other organizations have made managersââ¬â¢ annual pay raises partly dependent on 360-degree feedback about how they plan and implement decisions, in which perceptions of process fairness ? gure prominently. Recent corporate scandals show that giving workforces outcome-only directives (ââ¬Å"I donââ¬â¢t care how you get there, just get thereâ⬠) can be disastrous. Forwardthinking organizations care not only about the outcomes their managers produce but also about the fairness of the process they use to achieve them. This is not a call for micromanagement.Just as there is usually more than one way to produce ? nancial results, there is more than one way to involve people in decision making, to communicate why certain actions are being undertaken, and to express thoughtfulne ss and concern. â⬠¢Ã¢â¬ ¢Ã¢â¬ ¢ There is a moral imperative for companies to practice process fairness. It is, simply put, the right thing to do. As such, process fairness is the responsibility of all executives, at all levels, and in all functions; it cannot be delegated to HR. But with that moral responsibility comes business opportunity.An executive must minimize the costs of decisions that might threaten employees and maximize the bene? ts of decisions that may be sources of opportunity for them. In both instances, practicing process fairness will help get you there. The sooner you realize it, the better off you and your company will be. Reprint R0603H To order, see page 151. ââ¬Å"A new, surprising, and authoritative take on an important aspect of modern society that most people just donââ¬â¢t know about. â⬠Toby Lester, Deputy Managing Editor, The Atlantic Monthly Fred Reichheld is the godfather of customer loyalty. His new book, The Ultimate Question, continues to push the envelope with innovative, practical ideas. â⬠John Donahoe, President, eBay Marketplace ââ¬Å"Perceptive analysis brought to life by references to real people and real situations. â⬠Kieran C. Poynter, Chairman, PricewaterhouseCoopers LLp AVAILABLE WHEREVER BOOKS ARE SOLD, INCLUDING: 5th Ave. & 46th St. , NYC Rockefeller Center 5th Ave. & 48th St. , NYC HARVARD BUSINESS SCHOOL PRESS www. HBSPress. org
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