Fairness

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Fairness Leadership

• Executive Leadership
• Spring 2008

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Discussion Question

• Have you ever been treated unfairly at work
  and/or witnessed a co-worker being treated
  unfairly?
• Tell a story about your experience.
• How could the situation have been resolved in a
  different (more appropriate) manner?

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Discussion Question

• Imagine you are managing a group of employees.
• Why should you care about whether your employees
  feel fairly treated?
• Practical
• Legal
• Ethical

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Types of Fairness

• Distributive
• Outcomes
• Procedural
• Processes Procedures
• Interactional
• Interpersonal treatment

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Distributive Fairness

• The perceived fairness of the outcomes of
  organizational decisions.
• Sample Measure
• Do outcomes reflect the effort you put into your
  work?
• Are outcomes appropriate for the work youve
  completed?
• Do outcomes reflect your contribution to the
  work?
• Are outcomes justified, given your performance?
• Types of decisions
• Pay Compensation
• Performance ratings
• Smoking ban
• Benefits (e.g., Flexible work schedule)

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Quick Pay Fairness Fact

• On Halloween 2004, Latrell Sprewell, who was in
  the final season of a 62-million, five-year deal
  he signed with the Knicks, said he was insulted
  by Minnesota' s offer of a contract extension
  that was reportedly worth between 27 million and
  30 million for three seasons. His exact quote
• Hey, I've got my family to feed"

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Discussion Question

• How do you determine if your pay is fair?

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Example

• Mary works at Bank of America as a teller and
  makes 36,000 per year. She makes more than the
  other 5 tellers in her department who average
  32,000/year.
• Bob works at H R Block as an accountant and
  makes 110,000 per year. He is the lowest paid of
  the 5 members in his department who average
  118,000/year.
• Who is more likely to report higher pay
  satisfaction, Mary or Bob?

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Employee Judgments About Pay Fairness
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Dilbert
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Distributive Fairness Rules

• Distribute outcomes based on
• Equity
• The more one contributes, the more one receives.
• Equality
• All employees are given the same outcome
  regardless of their input.
• Need
• The employees who need an outcome the most
  receive more.

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Procedural Fairness

• The perceived fairness of the procedures used to
  make decisions.
• Sample Measure
• Are you able to express your views during
  procedures?
• Can you influence the decisions arrived at by
  procedures?
• Are procedures applied consistently?
• Are procedures free of bias?
• Are procedures based on accurate information?
• Are you able to appeal the decisions arrived at
  by procedures?
• Do procedures uphold ethical and moral standards?
• Types of procedures
• Method for hiring new employees
• Process for promotion decisions
• Ability to provide your input before decisions
  are made

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Discussion Questions

• Do fair procedures at work really matter or are
  people just focused on whether they get the
  outcome they want?
• When do you think fair procedures will matter the
  mostafter a positive outcome or a negative
  outcome?
• What would make you think a procedure is unfair?

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Three drivers of process fairness

• Employees believe that they have input. Are
  opinions given serious consideration?
• Employees believe that decisions processes are
  applied consistently. Are decisions
• Consistent?
• Based on accurate information?
• Free from bias?
• Transparent?
• Amendable?
• Announced in advance?
• Employees are offered adequate explanations

Brockner, J. (2006). Why its so hard to be fair.
Harvard Business Review, March 1-8.
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Why is it so hard to fair?

• Managers believe that tangible resources are
  always more meaningful than to employees than
  fair treatment
• Some benefits of fairness may not be obvious
• Corporate policies may hinder fair procedure
• Some managers believe that employees should be
  kept in the dark
• Managers tend to avoid uncomfortable situations

Brockner, J. (2006). Why its so hard to be fair.
Harvard Business Review, March 1-8.
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Discussion Question

• Given what we discussed about distributive and
  procedural fairness
• Why do you think people differ in their support
  of voter identification processes in public
  elections?

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Interactional Fairness

• The perceived fairness of interpersonal
  interactions at work.
• Sample Measure
• Have you been treated you in a polite manner?
• Have you been treated with dignity?
• Have you been treated with respect?
• Has your manager refrained from improper remarks
  or comments?
• Types of interactions
• Conversation with manager
• E-mail from top management
• Performance appraisal feedback

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Quick YouTube Example

• Terrell Owens
• http//www.youtube.com/watch?vHdeRTDpykyo
• Milton
• http//www.youtube.com/watch?vrASYS0WKcU4
• Ken Miller
• http//www.youtube.com/watch?vaO5us0qHcwc

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Interactional Fairness Rules

• Interpersonal treatment
• Treating people respectfully
• Avoiding improper comments
• Explanations
• Providing adequate justifications
• Being honest

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Fairness, Selection, the Law
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Title VII (1964)A quick Summary

• An employer cannot adjust
• Hiring, firing, promotions, transfers, work
  space, compensation, benefits, or privileges
  based on
• Race
• Color
• Religion
• Sex
• National Origin
• Of note Age, Disability, and Sexual Orientation
  were not included in the 1964 Civil Rights Act.

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EEO affects many aspects of management

• Staffing
• Methods for selection
• Outcomes of selection methods
• Termination (i.e., selection in reverse)
• Training and development
• Equal access to developmental opportunities
• Performance appraisal
• Accurate evaluation of employee performance
• Compensation
• Allocation of pay for performance

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Employment Discrimination

• If the selection process discriminates against
  anyone protected under Title VII, then the
  process may be illegal.
• Two types of illegality are possible
• Disparate Treatment
• Disparate Impact (Adverse Impact)

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Employment Discrimination

• According to Title VII
• Disparate Treatment occurs when
• Selection and promotion procedures are intended
  to treat people differently based on group status
• An employer knowingly and deliberately
  discriminates against people on the basis of
  specific characteristics, such as race or sex.

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To make a claim of disparate treatment

• Evidence must be direct
• For example, women are not to be hired for the
  following jobs
• Or
• If blatant actions do not exist, there could be
  evidence of mixed motive
• Both a legitimate reason (job qualification) and
  an prohibited reason (race) are mixed together
  and contribute to negative decisions

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Proving disparate treatment

• Defendants Rebuttal
• Hired someone betteror
• Race, gender, etc is a bona fide occupational
  qualification (BFOQ)
• BFOQ absolves an employer from liability for
  discrimination when there is a legitimate reason
  to require, for example, that all employees
  working in a particular job be of the same sex or
  age.
• Successful use of BFOQ defense is rare.

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Hooters BFOQ

• Hooters came under fire after the EEOC alleged it
  violated Title VII of the Civil Rights Act by
  discriminating against men.
• In 1992, 7 men argued that Hooters discriminated
  against them when they refused to hire them as
  wait staff.
• Hooters claimed, since the restaurant provides
  vicarious sexual recreation, female sexuality is
  a BFOQ.
• But Hooters markets itself as a family restaurant
  - not a sexual entertainment business.
• After failed PR, Hooters agreed to pay 3.75
  million to the men who were denied the
  opportunity to serve as Hooters Girls.
• Wait staff would still be all women, but be
  assisted by Hooters Persons hired without
  regard to gender.

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Special Notes about BFOQ

• Recall employer cannot discriminate on the
  basis of religion, gender, or national origin
  unless employer tries to suggest BFOQ.
• Law further states..
• Race or color can NEVER be a BFOQ.
• Religion could be considered a BFOQ when
  membership in a certain religion is reasonably
  necessary to the performance of a job.
• Example selling religious articles or books.
• Of note, religion as BFOQ is not likely to apply
  to any jobs outside of religious organization.

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Employment Discrimination

• Adverse Impact - facially neutral employment
  practices adversely affect different groups
• For example,
• Use of specific selection criteria (intelligence
  test, educational requirement, strength and
  ability test) adversely affects a particular group

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The Classic Disparate Impact Case Griggs v. Duke
Power

• Following passage of the Civil Rights Act of
  1964, Duke Power began requiring high school
  diplomas and achievement of minimum scores on an
  IQ test to work there.
• Many current employees who received adequate job
  performance ratings couldnt meet the new
  standard.
• The requirements tended to work strongly against
  African-Americans, who had not previously had
  access to fair education in the regions where
  Duke operated.

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Griggs v. Duke Power

• Case involved the legality of Dukes employment
  tests
• Statistical evidence showed that significantly
  more blacks than whites failed the tests and were
  excluded from employment.
• Since Duke could not prove that the test was a
  business necessity, the Supreme Court held that
  the tests were unlawful.
• The court ruled that the new standards were
  simply a pretext for discrimination

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Proving disparate impact

• Plaintiffs Initial Burden
• Must show that the practice in question
  disproportionally affects a protected group
  relative to the majority group
• 4/5s rule There is disparate impact if the
  hiring rate for a protected group is less than
  4/5s (80) of the hiring rate for the majority
  group.
• Hire 5 of 10 women, 75/100 men. Disparate?
• Hire 6 of 10 blacks, 75/100 whites. Disparate?

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Quick Summary

• Fairness in the workplace matters for practical,
  legal, and ethical reasons
• Multiple types of fairness are important
• Treating employees fairly probably helps improve
  performance, job satisfaction, and commitment
  because fair treatment helps satisfy employee
  needs