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I was ironically sitting in a class on Organizational Behavior one Friday last fall when my phone buzzed with a text. It was my business partner.
“We’ve got a problem.”
“What’s going on?” I wrote back.
“We have a revolt on our hands.”
I excused myself from class to give him a call. As it turns out, approximately ⅓ of our company had just walked into the office and demanded a pretty significant raise. Over the years we had made efforts to create a healthy, productive work environment for everyone, yet something wasn’t working. These employees were being paid a fair, competitive wage. They had ample opportunity to improve their lot by reaching milestones and accomplishing goals, each with a raise tied to it. So, what went wrong? Why did they feel like they needed to take such a drastic step?
In a nutshell, they felt as though they were being treated unfairly. And we could have prevented that. Since then, we have developed 3 key “Principles of Fairness.”
1) Communicate the Process
2) Measure and Quantify
3) Weed out the Underperformers
Communicate the Process. Do your employees know what everyone else is earning? Many of you might be tempted to say “no.” And you may be right, but probably not. Human beings are nosy creatures and we like to share personal information. Your employees are talking, and they are probably talking about salary. Before you try to crack down on such chatter, know that it’s illegal in most circumstances to prohibit employees from sharing salary information with other employees, and it has been since the National Labor Relations Act was passed 84 years ago in 1935.
Did you just recently hire someone who is getting paid more than someone else in your company? Why? You may have a good reason. Perhaps the new person has extensive experience, or specialized training. There isn’t a company in the world that starts every single employee at the same salary, and people understand this.
But they also need to understand why someone else is getting paid more than them. Just put yourself in their shoes. You’re getting paid $14/hour and you’ve been there for 2 years. The boss just hired a new person at $14.50/hour and that person seems to be doing the same work as you. How would you feel?
If you’re like most of us, you’ll probably be annoyed. And you’ll probably tell other people in the company just how annoyed you are. You may even get a bunch of other people to be similarly annoyed. But instead, imagine you knew that this person had a relevant degree plus 10 years of experience at a similar company and was temporarily helping your team before moving into a more senior position. Now you might be fine knowing that they’re being paid more. Because now it seems fair.
Measure and Quantify. When you give an employee review, how much concrete, quantifiable data do you use? Consider these common exchanges.
“You’re taking too long to get jobs done.”
“Yeah, but I’m trying to do a great job so the customers will be happy.”
“Your energy is really low lately.”
“Yeah, but I’m tired from all the hours you have me working.”
I’ve probably heard “yeah, but” 1,000 times over the years. Certainly, you can argue back against these excuses, but do you think they’ll agree with your criticisms? We all have an incredible capacity for self-delusion. We think that we’re contributing more than we are and that most criticism is unwarranted. When the criticism is largely an opinion, it can be disregarded. And when your employees are judged based on your opinion, they’ll just feel like the victim of an unfair system.
But imagine this instead.
“Your production level is 8% lower than average and your customer satisfaction scores are 5% below average.”
“Yeah, but…”
But what? There’s not much to debate when you’ve measured and quantified. People can argue against opinions, but they can’t argue against facts. So take some time to think through every metric on which you judge employee performance. Can you measure it? If you can, then do it. Keep track and provide that information to the employees during their reviews.
But there’s another benefit to this principle. By measuring and quantifying, you can find those people who have been flying under the radar. We have several employees who quietly outwork everyone, but we might not have noticed if we weren’t measuring output. We take great care of them. Similarly, we’ve had a few self-proclaimed superstars who did initially seem impressive. But the numbers told a different story. They’re working for someone else now, which leads into the next principle.
Weed Out the Underperformers. Let’s say you have a perfectly fair system in place, and everyone understands and agrees. Can you expect to have any further fairness related problems?
Oh yeah. You’d better believe it.
The fairest system in the world becomes unfair very quickly when underperformers don’t really earn their salary. The rest of the crew sees it and asks a very simple question. “Why is that person getting paid the same as me?” All of a sudden, things are unfair again.
This aspect of managing fairness requires active, constant attention on your part. You’re paying everyone a fair wage for their position. But are they earning it? If someone is an underachiever, you need to get them out. Sure, do your best to light a fire under them and let them know they need to step up their game.
If they improve, great. If not, it’s time to part ways. Keeping them around is simply unfair to everyone else. I know this sounds simple, but it’s hard to fire people in the middle of a busy season when work needs to get done. You’ll be tempted to keep all hands on deck. Don’t. The tradeoff in employee morale isn’t worth the extra warm body in the truck.
So What Happened?
It took some investigating to figure out what had triggered our mini revolt. We soon learned that it was a combination of us falling short on all three principles. We didn’t properly communicate the process of pay determination, so many workers were confused as to why they were earning what they earned. We didn’t use more concrete measurements with our reviews and discussions, so people felt picked on when we gave them subjective feedback.
They just disagreed and became disgruntled instead of accepting it and improving. Finally, we had several slackers in our midst who we kept too long because we had so much work to get done. Bad mistake. We would have been better off turning down new business instead of holding onto bad apples.
If you want to achieve true organizational success, you need to create and foster a fair work environment. But that’s only half the equation. It also has to be perceived as being fair by those involved. That will take some thought, planning, and strong communication on your part.
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