When I was a kid and things didn’t go my way, I would complain, “That’s not fair.” My dad would look at me and say, “Life isn’t fair.” And we would move on.
And, of course, life is not fair. Bad things happen to good people. Projects begun with the best of intentions and developed with people’s full effort can still fail. And, in some organizations, people are not always rewarded equally for the same level of work.
Why does this matter?
We generally think of business as something done by contract. I sign a contract with my employer that states my responsibilities, and the company makes an agreement about how I will be compensated for that effort.
The thing is, contracts are agreements that are designed for strangers. If I don’t know you very well and you don’t know me, then a contract is great. It stipulates exactly what you will do for me and what I will do for you, and the legal system enforces the letter of the contract.
But, companies do not function if they run only contractually. A good company has a mission to build a great product or to provide a first-rate service. That company has to succeed today and to look forward toward an innovative future. It is not possible to enumerate all of the tasks that go into making this company succeed.
And so, good companies do not really have contracts with their employees. They have covenants. A covenant lays out the vision of the company’s future. Employees agree to give their effort collectively to create that future, and the company agrees to support their employees through compensation, benefits, training, and the creation of a fair work environment.
In this way, companies do not engage in agreements with a group of strangers. Instead, they create a neighborhood in which everyone understands the role they play to help the company to succeed in its vision.
And that is where fairness comes in.
A covenant is what allows employees to feel like they are part of something bigger then themselves. They are engaged in working toward a significant future. People with that level of engagement put in the level of effort that is required to allow that vision to become reality, regardless of what the letter of an employment contract might say.
But, when the organization does things that feel unfair, it causes people to question why they are part of this community. If upper management is compensated far more than rank-and-file employees, even in economic downturns, it creates a sense of unfairness. When one person is promoted despite the presence of other people who seem more deserving, it creates a sense of unfairness. When projects that people have worked on for a long time are cut without explanation, it creates a sense of unfairness.
That feeling that the situation is unfair leads people to ask whether they are truly part of a community. They begin to wonder whether the organization really deserves a covenant. And at that times, people may begin to revert back to the letter of the contract they signed rather than the spirit of the vision of the organization.
For example, teachers and nurses will often engage in a “job action” when they are involved in contract disputes. In those situations, the employees believe they are being treated unfairly. So, they only perform the duties they are contractually obligated to perform. Teachers arrive exactly when they are required to and leave as soon as they are able. They do not engage in extracurricular activities or stay late to help struggling students. The community suffers, because the teachers have gone from treating the workplace as a neighborhood to treating it as a collection of strangers.
That is why it is so important to think about fairness. When the morale of an organization suffers, it is important for leaders to think about things they may have done that would push employees from thinking themselves as neighbors to thinking of themselves as strangers. At those times, it is important for leaders to hold out an olive branch and to do what they can to welcome disgruntled employees back into the neighborhood.