Golden Rules of Leadership - Shifting Culture
Continuing with our theme of the Golden Rules of Leadership we had the chance to catch up with our Managing Partner, Mike Donoghue to discuss some more of his thoughts and experiences leading teams and how to apply some of the concepts he thinks bring the greatest value to organizations and teams.
Q) In the webinar you presented on the Golden Rules of Leadership, you mentioned how organizational justice is a key aspect that is overlooked by many managers in establishing the organizations culture. Can you expand on the concept and how it influences culture?
My first encounter with the term organizational justice was just after I transferred to Canada in 2006, I was in a team meeting and the subject of fairness was raised regarding how to manage employee performance. The term started to become part of leadership discussions however it was only that, a term to infer treating employees fairly and holding them to account. The problem was that it was open to interpretation and ultimately to be misused; most conversations were getting non-compliant staff to be compliant.
I decided to research the term to better understand it and ensure I was using it in the correct way, little did I realize that the term wasn’t merely the latest flavor in the lexicon of leadership jargon but a well-researched and proven approach to create an organizational culture that when applied effectively and consistently delivers outstanding performance.
The concept of organizational justice was introduced by Jerald Greenberg in 1987, Academy of Management Review, A Taxonomy of Organizational Justice Theories. The concept was rooted in equity theory which in a broader context is how many of us view the world in which we live and work. In most social interactions a perception of fairness is applied to judge whether you have gained or lost as a result of the engagement. For example, an employee learns that a peer doing the same job as they are, is earning more money, then they may choose to do less work, thus creating fairness in their eyes.
Q) This sounds simple, is it that easy?
Not quite, to take the concept of organizational justice to a deeper level there are three tenets, these are:
In its simplest form, this can be the remuneration being applied equitably, as mentioned above. However, it can also be determined as recognition, praise or opportunities shown to one employee over another, or how work is distributed throughout the team. In the wider construct of society the ability to make these judgements can be blurred due to the multitude of external factors at play. Within the boundaries of a closed work environment, comparisons are easier to be determined and thus liable to result in perceptions of unfairness
If distributive justice concerns how outcomes are applied equitably to employees, then procedural justice can be considered to be fairness in the decisions making process.
I believe that there are two aspects that are critical to an employee’s perception of procedural justice being applied that ensure the perception is one that the company is seen as fair. Employees perceive procedural justice when they are given a voice in the development of the processes, procedures, and policies. This is a key part of our consulting methodology, our experiences have demonstrated that giving impacted employees a voice in the development of processes, procedures, and policies creates a sense of ownership in the outcomes and ensure employees perceive that the process, procedures, and policies are fair/just. A mentor of mine always held the belief that if you validate the inputs and agree and assure the methodology then the outcome is hard to dispute and push against, bringing employees into the validation of the inputs and getting agreement on the methodology leaves little doubt that the process, procedure, and policy is just and hence the outcome is also just.
Once employees and team members perceive that the process, procedures, and policies are just, the next important aspect is to be seen as applying the process, procedures, and policies consistently across all levels of the organization. No one gets a free pass!
I have seen organizations that enforce safety policies with contract staff whilst turning a blind eye to their own staff, failing to understand the cause of the non-compliance, and becoming more stringent in the application of the policy. But for a conversation to better understand the cause of the unsafe behaviour, morale and performance deteriorate. Leaving the organizations leadership at a loss for the reason.
The third tenet of organizational justice is the application of interactional justice, this has two elements which are informational justice and interpersonal justice. Both speak to treating people with dignity, respect, and sensitivity. It doesn’t mean hard decisions are avoided it means people are supported through the impact of the decisions that need to be made. To state it simply informational justice is when employees are provided adequate explanations with consideration given to timeliness and truthfulness of the communication. Interpersonal justice focuses on supporting employees through the process and the outcomes of the decisions. An example can be shown through an experiment conducted by Jerald Greenberg, whereby a manufacturing organization reduced pay in two of its plants. In one of the plants, the reason for the pay cut was explained in a sensitive and respectful manner and in the other plant, no explanation was given to employees. Following the pay cut, the amount of employee theft that occurred in the plant where no explanation was given had higher theft rates whereas those who received a sensitive explanation stole less; moreover, perceptions of inequity were reduced.
Q) So what can an organization expect as a result of applying the three tenets of organizational justice?
At Helios Consulting we emphasize context before content and as such, I should have mentioned this earlier. A positive workplace culture is not created by the demand of senior management, as its name suggests culture is the organic result of every interaction throughout the organization. Growing a positive workplace culture can result in a range of benefits as mentioned below.
Studies by the Queen's School of Business and by the Gallup Organization indicated that disengaged workers had:
· 37% higher rates of absenteeism,
· 49% more accidents,
· 60% more errors and defects.
In organizations with low employee engagement scores, they experienced:
· 18% lower productivity,
· 16% lower profitability,
· 37% lower job growth,
· 65% lower share price over time.
Better retention avoids wasted costs in employee replacement. The Society for Human Resource Management (SHRM) estimates the average replacement cost of a salaried employee to be six to nine months’ salary.
For those employees who remain, The American Psychological Association (APA) estimates that workplaces with poor cultures result in higher stress levels. Workplace stress costs typically 50% more in health claims than at organizations where an emphasis is placed on positive workplace culture.
Q) These are all tangible outcomes but how does organizational justice cause a change in the culture?
Correct they are just a sample of why organizational justice matters in the workplace.
On a personal note, a senior manager once made a statement to myself and my peers that no person ever wakes up, then decides to come to work and create problems, through bad attitude and poor performance. Also, that it is the manager/ leader that creates the problem employee. Sad to say the same manager demonstrated behaviours that were not consistent with organizational justice and consequently had more than a fair share of poor performers. So, if this is true, then why does every organization have performance management processes to discipline or move problem employees out of the organization. I won’t argue that these processes aren’t required, however, I do believe that they are required more often because the culture of the organization is not focused on organizational justice. When applied effectively organizational justice results in the Organizational Citizenship Behaviour (OCB).
OCB is defined as "individual behaviour that is discretionary and not recognized by the formal reward system. It's voluntary it comes from intrinsic motivation and happens when the mind, heart and gut are aligned. It improves upon the effective functioning of the organization."
How a person feels about his team, company or organization is inherent to how they perceive they are valued and how they value themselves. By effectively applying each of the tenets of organizational justice, the perception of fairness employees experience generates and sustains the culture through OCB.
If you were able to take some value from the conversation or if think your team or organization needs some help or you still need to discuss how these concepts will benefit your organization, Send us a message - a phone call doesn't cost a thing.