Consultants' Corner

Should You Care About Fairness?

Clay Ricord
Insurance Experts' Forum, May 25, 2010

Should you care about fairness? More precisely asked, should you care about the perception of fairness? Most everyone works in groups or teams at their place of employment. You may even head a team or manage multiple teams. Should you pay any attention to how you and others gauge fairness? After all, we all know that the world is not fair.

Let’s start with the premise that good managers and good teammates want to be fair and equitable. There are times that we consciously decide that a situation is unique and should be treated differently. Accommodations are then made to avoid situations that would result in an inequitable outcome—this can be perceived as unfair.

Theoretically, we should focus on our own work, not what our coworker in the next cubicle is or is not doing. However, we tend to assess if we are being treated fairly. Studies show we possess an internal fairness check, and that when events go beyond the norm, we have a response that affects our behavior and, in turn, our relationships.

In the book Sway: The Irresistible Pull of Irrational Behavior, authors Ori and Rom Brafman tell of an interesting experiment. Groups of people are divided into teams of two, with each team consisting of a “decider” and a “receiver.” The decider will split a sum of money between the pair, and the receiver can choose to accept or not accept the split.

Two key patterns emerged:

1. Not all cultures responded the same way—for example, Americans and Russians had diverse responses in their view of fairness.

2. There is a point where some participants chose to receive nothing if they thought the split was unfair. (In the Brafman's study, most deciders split the money 50/50).

From my observation and experience in the workplace, social accountability and effort accountability are the two distinct categories to pay attention to. In the social accountability category are the behaviors of attendance, promptness, interpersonal exchanges, task avoidance, etc. When one’s behavior reaches the point that things are “swayed” to the unfair side, either direct or passive resistance from the teams will likely occur; this is where many managers have a hard time seeing and addressing these behaviors.

In the effort accountability category are the work product traits of production and quality. When unfairness is perceived, the team or individual tends to adjust their own work downward. In what appears to be an attempt to reestablish fairness, there is a rebalancing of efforts that sometimes results in lower performance; in turn, impeding progress toward the team’s established goals.

There are three simple steps to address the perception of fairness:

1. Be clear about all expectations

2. Be aware of the gap from actual to expected

3. Actively close the gap by using metrics, scorecards, reviews, one-on-ones, and dashboards

As you can see, communication is critical. And just as critical—and more difficult—is knowing when there is a variance in behavior that needs to be addressed and then addressing it.  That, of course, is the age-old challenge of managing people and working as a team.

Clay Ricord is a senior consultant for the Robert E. Nolan Co., a management consulting firm specializing in the insurance industry.

Readers are encouraged to respond to Clay using the “Add Your Comments” box below. He can also be reached at Clay_Ricord@renolan.com

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

The IT-Savvy 10 Percent

IBM survey reveals best practices of IT leaders.

The Software-Defined Health Insurer: Radical But Realistic?

Can a tech startup digitally assemble the pieces of a comprehensive, employer-provided health plan?

Data Governance in Insurance Carriers

As the insurance industry moves into a more data-centric world, data governance becomes more critical for ensuring the data is consistent, reliable and usable for analysis.

Fear This

Just days before this Issue, which contains our security cover story, went to press, we got some interesting news: 1.2 billion unique usernames and passwords and 542 million email addresses were reportedly stolen from 420,000 websites, according to The New York Times. The websites ranged from Fortune 500 companies down to small online retailers.

Should You Back Up Enterprise Data to the Cloud?

Six questions that need to be asked before signing on with an outside service.

Modernizing Information Management

While better reporting and actuarial analysis help to support financial decisions, improved analytics and decision making greatly assist the rest of the organization.

Advertisement

Advertisement