Why some managers treat employees fairly while others don’t

Professor Marius van Dijke of Rotterdam School of Management (RSM), Erasmus University, tells Stephanie Mullins, Associate Director of BlueSky Education, about leaders who value fairness and why it’s so beneficial. Here are his thoughts: 

In a perfect world, this article wouldn’t exist. All managers would act fairly to all employees, and that would be that. But the fact of the matter is that many managers don’t act this way. Why? What are the specific factors that influence this important organizational behaviour? Some of the answers are counter-intuitive, and may surprise you.

Study after study has explored the effects of perceived social justice in organizations. And in times of upheaval and change – a time we are all going through in today’s COVID-19 crisis – it is more important than ever for an organization’s members to be treated in a just manner. But what actually makes leaders act in fair or just ways towards their subordinates? It’s an important question, because the benefits are clear.

Justice enactment has clear benefits

Business leaders (or managers) who treat employees fairly are engaging in what is known as justice enactment. And of course, this has a positive effect on employees, as countless studies have shown. Those who are treated fairly feel valued and appreciated by the organization they work for. They experience a greater sense of control, along with a sense that they are being treated in a morally appropriate way. They also tend to trust their employers more, show higher job satisfaction, and experience lower rates of job-related stress and burnout. When employees experience justice, they demonstrate better internal job performance in terms of their day-to-day activities. Just as importantly, they also show improved external job performance. In other words, their performance and attitude also rises when it comes to activities not explicitly laid out in their contract – they are more likely to help other colleagues, speak up about organizational or process improvement, and defend the organization in the face of criticism.

The complicated role of self-interest

Okay, given that justice enactment works better for an organization and its employees, what stops it from happening? One way to look at it is through the lens of self-interest. Selfish behaviour can definitely result in negative effects on employees. And we also know that leaders who show higher levels of agreeableness, moral identity, prosocial motivation and empathy are more likely to enact social justice. Plainly put, nice people do nice things. But this isn’t the whole story. Counter-intuitively, leaders can engage in justice enactment for self-serving reasons too, especially in times of instability. Leaders in unstable power positions – positions that their subordinates could potentially take over – are actually more likely to act fairly. Why? To protect themselves. For instance, imagine that a manager whose position is unstable has an excellent employee who could easily fill their shoes. Now imagine that this employee is perceived by the manager as having low integrity.

In other words, the employee might go behind the manager’s back, actively seeking to replace them or even sabotage their activities. This type of employee could then be seen as a threat. Interestingly, research shows that managers are more likely to treat these employees fairly – they don’t want to make them an enemy or give them ammunition.

Can managers be truly impartial?

When transgressions occur in organizations, leaders need to respond. Ideally, they will respond in ways that are fair. Let’s add one more factor into the mix: the idea of impartiality. In society at large, we operate under the assumption that our system of justice tries to treat transgressions fairly, whether the person is a judge in a court of law, a referee on a sports field, etc. Of course, there are issues here, and the world has recently seen that legal justice systems can be prone to bias, and referees can be bribed. But this problem is even more prevalent within organizations.

Let’s look at a typical manager who supervises 30 people. If one of their people succeeds, the manager looks good. If one of them fails, they look bad. Imagine, for instance, that a manager discovers that their best employee has used their company credit card to buy them a dinner, when they were not supposed to. If they fire the employee, they are losing their best person. Plus, they benefitted from the dinner in question, even if they didn’t know about the transgression at the time.

This is where the idea of cognitive impartiality – and something called construal level – come into play. Construal level theory explains that people can construe things in concrete ways or abstract ways. Managers who show a high level of abstract construal (all credit card transgressions must be punished) also show a higher level of impartiality. Managers who show a high level of concrete construal (credit card transgressions are bad, but there are a variety of other factors that affect my employee, me, and my boss) are more likely to be partial. In other words, abstract construal leads to a mindset that does not focus on minor, unimportant differences between situations – the very same differences that partial managers can use to treat the same transgression in different ways. When transgressions are the same, only leaders with abstract mindsets treat them the same.

Justice enactment can actually protect an organization

Part of ensuring justice enactment is the encouragement of transparency. However, this is where many organizations inherently see danger signs, especially in times of trouble when layoffs and downsizing occur. What happens if they are too transparent and it comes back to haunt them in an employee court case? Wouldn’t this give the employee an advantage? Actually, not in the long run. Case studies demonstrate that downsizing organizations use types of approaches toward their employees. The first approach focuses on employees’ material well-being during times of layoffs. The second approach focuses on what is called procedural and interactional fairness. This is characterized by open communication, in which the organization lets each employee know that they understand their feelings of uncertainty, and explains that they care about their individual needs. And this approach works better. Companies who are more transparent and who share more information have employees who are less likely to litigate in the case of dismissal.

Perhaps this leads us back to the world of common sense. In these COVID-19 times, layoffs are unfortunately occurring at an increased rate. This demands increased fairness. But justice enactment is not always easy to implement, for the variety of factors raised in this article. It is therefore more important than ever to understand the complex processes that underlie it. Companies that encourage the enactment of social justice through a fair, transparent and empathetic approach may emerge in a better position than those who don’t.

Marius van Dijke is Professor of Behavioural Ethics at Rotterdam School of Management, Erasmus University. His research is concerned with behavioural ethics and leadership of high integrity, for example when power stimulates moral and immoral behaviour, why people value social justice so deeply, and the role of intuitive and controlled processes in moral judgment and behaviour. These issues have important implications both for theory and practice because they supply tools that stimulate employees and managers to function both productively and ethically.