From an ethical perspective, most people would agree that companies and managers should treat their employees fairly. But is there also a business case? Does it make a difference for performance outcomes if companies establish fair procedures and policies and managers treat their employees with respect? A recent study of 869 military personnel and civil servants, conducted by Michael Cole, Jeremy Bernerth, Frank Walter, and Daniel Holt, strongly suggests that there is indeed such a business case – with employees’ fair treatment producing tangible, important outcomes that few companies can afford to neglect.
What happens if employees feel that they are treated unjustly? What happens if employees perceive that the rewards they receive do not reflect their performance, that the companies’ procedures and policies are unreasonable, or that their supervisor treats them with disrespect? The study demonstrates that such events do not only create major stress among employees and exhaust them emotionally but also reduce employees’ ability to deal with the demands and expectations of their work. In other words, perceptions of injustice contribute to employees’ burnout – and this, in turn, goes along with severe, performance-relevant consequences. Employees that are emotionally exhausted from continued exposure to unfair treatment foster several types of withdrawal thoughts and intentions. They become less committed to the organization, and they begin to seriously consider leaving their current position. Hence, unfair treatment not only damages employees’ psychological health but also disrupts organizational attitudes and behaviors and, eventually, can result in a loss of valuable talent.
What can organizations and managers do to circumvent these detrimental consequences? While the organizational justice literature distinguishes several justice types, our research suggest that two specific forms of fair treatment are particularly important. The first of these justice types refers to how the organization, as a whole, treats its employees. It is associated with employees equity perceptions – do employees perceive that they are adequately compensated for their efforts and investments in the job (viz., distributive justice)? To avoid perceptions of distributive unfairness, organizations should make every attempt to ensure that outcomes are allocated appropriately and equitably reflect individual employees’ contributions. Importantly, this does not only refer to monetary outcomes (e.g., pay and promotions), but also to non-monetary outcomes such as the recognition employees experience in their job.
The second crucial type of organizational justice is more personal, as it refers to the way managers and supervisors treat their direct subordinates. Perceptions of what has been called interactional injustice arise if employees feel that their supervisor does not treat them with sufficient respect and dignity, reducing employees’ feelings of self-worth and evoking the negative consequences outlined before. Organizations should, therefore, aid their managers in avoiding such deleterious behavior, for instance through socialization tactics that emphasize the value of mutual respect, through training efforts, and through role-modeling of appropriate, fair behavior at all levels of the hierarchy.
In the end, treating employees fairly certainly is a matter of moral and ethical considerations. Beyond this, however, it is also a matter of sound business practice that will eventually pay off in the company’s bottom-line.
Source: Cole, M. S., Bernerth, J. B., Walter, F., & Holt, D. T. 2010. Injustice and individuals’ withdrawal: Unlocking the influence of emotional exhaustion. Journal of Management Studies, 47, 367-390.
Image of “Work Ethic” by Tomas Schneider
Brochure Expertisecentrum HRM/OB
