Have you ever been treated unfairly? How did it make you feel?
In a previous article, I wrote about how important it is to think about status when trying to lead or persuade others. People are very sensitive to threats to their status, and they definitely do not want to feel taken advantage of. In this article I examine how important fairness is to leadership, negotiations, and even presentations. More importantly, we will look at ways to exercise our fairness capability.
In almost any human interaction that involves trying to influence or persuade, fairness is a tremendously important factor. It’s a cornerstone of leadership, because it’s one of the most important ingredients in trust. We know from common sense that leaders who are seen to be fair will be more effective, but let’s look also at the research. A 2007 paper studied the literature and found numerous studies linking fairness to more effective leadership, including greater trust in the leader, enhanced job satisfaction, and greater commitment to the organization.
When you’re trying to negotiate a deal, fairness will drive people to choices that don’t seem logical. An experiment that psychologists like to run to show economists how wrong they are is called the Ultimatum Game. It goes like this: suppose you are walking down the street and someone beckons you and a passing stranger over. He makes an interesting offer: He will give the two of you $100 to share, but the stranger gets to choose how much he keeps and how much you get. The only catch is that you both must agree to the proposed split, or neither one of you gets the money. If the stranger proposed to keep $90 and give you $10, how would you respond? An economist would predict that you would accept the split, because you will be $10 richer without any work. But that is not what most people do. For splits up to about 30% up to half people will reject the offer as unfair and will punish the stranger for their low-ball offer.[1] They would rather lose $30 than see someone take advantage of them. That’s not a “rational” decision, but it is a very human one, one that has probably been hard-wired into our systems through years of human evolution, possibly because there is survival value for communities in which the members cooperate and act fairly with one another.
Even in presentations, people who present both sides of an issue even though they advocate one side are seen as more believable, and I believe that’s partially caused by our sense of fairness.
Conscience is not enough
Besides being good policy, fairness is of course a moral obligation. I will assume that you are a person who cares about doing the right thing. Good intentions are an excellent start—but they’re not enough. Some people feel that as long as they know they’re doing the right thing they will be OK, but sometimes that can lead to self-righteousness and inflexibility. “Doing the right thing” can still create problems, because perceptions of fairness can vary wildly depending on the perspectives and interests of the various parties in the situation. Leaders and communicators must not only do the right thing but also be seen as doing the right thing. As Brit Hume said, “Fairness is not an attitude. It’s a professional skill that must be developed and exercised.”
What affects the perception of fairness?
The problem is that there is no gold standard of fairness that applies in all situations. Even the Golden Rule will fall short if others don’t want to be treated the way you want to be treated.
There are three main ways to define fairness:
- Equality: everyone gets equal slices of the pie.
- Equity: people get back according to their contribution or some other criterion. The person who baked the pie gets two slices.[2]
- Needs-based: people receive according to their needs. The one who missed dinner gets two slices.
Which rule applies? I guess it depends on how hungry you are at the time and how much you like that kind of pie. As you can see, fairness can be a very slippery concept to try to define and will not be the same depending on the situation.
The process often matters just as much as the outcome. No one likes to get less than others, but if they understand the process they are much more likely to accept it. If “winners” are chosen by lottery and everyone has an equal chance, that’s OK.
Fairness is also very context-dependent. For example, as capitalists, we all believe in the sanctity of the supply/demand relationship, right? When demand goes up and supply is tight, according to this principle, it is perfectly OK to raise prices. But what if you live in South Florida as I do, and when the weather service says there is a hurricane on the way and you go to Home Depot to buy a generator only to find that prices have doubled since the week before. What would you think about that?
Some Basic Principles for Keeping Things Fair
Have good reasons and be transparent. Let others know the process or the decision rules you use. Because fairness is so closely tied to status, the last thing you want is for the other person to take it personally—which they will, unless you can justify your position through an appeal to something outside of yourself. It may be precedent, or a third party estimate, or chance, but it has to make sense.
Be consistent. Others may not like your specific process or rule, but once it’s applied they will base their future actions on it, so use it in similar subsequent situations.
Be flexible. I realize that this principle directly contradicts the one above, but a wise leader always looks at context and may choose to be inconsistent if the situation calls for it. Times change, attitudes evolve, and what made sense yesterday may seem crazy today.
Listen. The term prejudice implies pre-judging, or making a decision without considering all the evidence. To the extent that time allows, gather all sides of the story. People want to know that they have been heard and at least have a chance to present their case.
Leave something on the table. Sometimes things fall into place and you have all the power in the transaction. If you take advantage of the situation and squeeze everything you can out of it, bad things will happen; maybe not right now, but they will someday. Some historians believe that the punitive terms imposed on Germany after WWI led directly to Hitler and WWII. If you give when you don’t have to, someday you might get when you need it.
Obviously, it’s not easy to be fair in every situation, but it’s important. As John Wooden said, “In all circumstances, whether as a coach, teacher, or business leader, you must begin by determining exactly what is fair. That means you must eliminate prejudice of all types. Can you do it 100 percent? Probably not, but you can try.”
[1] http://money.howstuffworks.com/ultimatum-game1.htm
[2] John Wooden, the great UCLA basketball coach, said, “Fairness is giving all people the treatment they earn and deserve. It doesn’t mean treating everyone alike. That’s unfair, because everyone doesn’t earn the same treatment.”
