March 8


Why is being fair an essential leadership skill?

You are approached by a stranger who tells you they've been given £100 to share with you.  They get to choose the amount to give you.  If you accept their offer, they keep the rest.  If you don't accept their offer, neither of you gets anything.

Now imagine the stranger offers you £5.  If you accept, they keep £95.  How do you respond?


If you're thinking purely logically, you'll take the money.  After all, you'll be £5 better off than before you met the stranger.

But, most likely, you won't accept the offer and you'll both lose out. 


Because you didn't feel it was a FAIR offer. They were going to get £95 and you were only going to get a fiver.

The Ultimatum Game

This vignette is a version of the Ultimatum Game, used by psychologists to test the importance of fairness in decision making.

In one version of this game, the amount offered is always the same, but the total amount of the 'pot' is varied. For example, the offer might always be £5, but the total amount of the pot varies from £10 to £100.

The results are interesting: even though the subjects stood to gain exactly the same amount of money, they were much happier with what they perceived to be fair offers and much more disdainful of deals that were strongly biased in the other person's favour.

In other words, if the person didn't feel the offer was fair, they tended to reject it.  Even if they accepted it, they usually resented the other person getting a better deal.

So what?

It all goes back to building a culture where people are involved with, committed to, and enthusiastic about their work (also described as actively engaged).

In my last newsletter, I explained the importance of Competence, Relatedness and Autonomy to someone being self-motivated in their job.  What increases sales by 20% and profitability by 21%?

It doesn't matter if someone feels a sense of accomplishment in their job, connected to what they are doing, and have control over what they do; if you treat them unfairly, they will lose their self-motivation.

The impact of being treated unfairly lasts a long time and it is hard to recover the relationship when it happens.  Think back to the last time you were treated unfairly.  How did it feel? How does it feel now?  Unless you're very good at letting go, you will still experience pain from the event.

There are many ways people in your team will see, feel and experience injustice.  But perhaps the most effective way to demotivate a high performing team member is to NOT address other team members' performance issues.

The star performer wonders why they're working so hard and giving so much when others aren't.  It's just not fair that Donna Do-Nothing can swan around the office, that Timothy Organisational-Terrorist can get away with not living the values, and that Nigel Never-Delivers is allowed to miss deadline after deadline. 

Slowly, but surely, they drift, lose focus, become less engaged, less productive, less giving.  And eventually they leave.

Your job as the leader

Being fair is a key element in building an engaged workforce.

As the leader, you need to consciously reflect on how your actions are being perceived by your team. They are always watching you to check you are acting fairly. 

Your job is to act, and be seen to act, fairly.  To ensure the organisation acts fairly.

And it's not just about treating the individual fairly.  People don't like it when others are treated unfairly. They feel discomfort; wonder if they might be next to suffer. You need to treat employees, customers, suppliers and other stakeholders fairly.  And do it consistently. 

So, are you and the rest of the leadership team acting, and being seen to act, fairly? 

Remember the upsides of building a team who are involved with, committed to and enthusiastic about their work versus a team that isn't? …. 20% increase in sales, 21% increase in profitability; 41% less absenteeism; 17% higher productivity

PS: I help business owners and MDs unlock the potential in their business to deliver significant increases in sales and profits within one year. Get in touch if you'd like to find out more about how I can help you achieve the results you want in your business by booking a time for a chat in My Calendar


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