Publication: Christian Science Monitor
Marilyn Gardner - Staff writer of The Christian Science Monitor
April 14, 2008
Over the past four or five years Nancy Albertini, an executive recruiter,
has seen an encouraging shift in the way companies treat their employees.
Instead of routinely favoring executives and ignoring the needs of other
workers, she finds, some are adopting more egalitarian attitudes. "For the
most part, I see fairness in the workplace," says Ms. Albertini, chairman
of Patterson Blackstone, an executive search firm in San Jose, Calif.
"Companies today, more than ever before, are thinking about how employees
are treated and how they can treat them fairly." In an uncertain economy,
when executives face hard decisions about where to make cutbacks, that
attitude becomes crucial.
It runs counter to stereotypes portrayed on TV programs such as Donald
Trump's "The Apprentice," where the boss glories in being tough, firing
people, and squeezing every penny out of suppliers. Research from the
Wharton School of Business and the University of Minnesota finds that many
managers aren't purely mercenary in their business dealings. They care
about fairness and understand that it can maximize their profits.
Albertini and other workplace specialists trace some of the shift toward
greater fairness back to 2003, when American Airlines union members
accepted $1.6 billion in annual concessions. The carrier's then-president,
Don Carty, spoke of "shared sacrifice." But when details of hefty
executive bonuses and pension protections became public, employees were
outraged. Where, they wondered, was the shared part of the sacrifice? Mr.
Carty was forced to resign. Today, Albertini says, some CEOs are paying
attention to situations like that. At the same time, she and others
acknowledge that exceptions exist.
Keith Ayers, a business consultant, witnessed one such exception recently
when he listened to a group of executives arguing about how big their
bonuses should be. In more stable times, the conversation might have been
unremarkable. But with the economy flagging, those executives face
challenges, including the need to reduce staff. "A lot of executive teams
think it's fair that they get their bonus and their share options even if
they have to cut costs, lay off employees, and cut salaries," says Mr.
Ayers, president of Integro Leadership Institute in West Chester, Pa.
"They may think it's fair that they don't lose out because they put in
long hours. But if employees have to sacrifice, then it's not fair. They
lose their trust in management and become disengaged." New figures on
executive pay, compiled by the compensation research firm Equilar, are
likely to further erode some employees' and shareholders' trust. They show
that compensation for CEOs at 200 companies averages $11.7 million.
Bonuses average $2.8 million.
An 'open-book culture' Still, fairness takes other, nonmonetary forms as
well. Firms that win coveted places on lists of "best companies to work
for" often maintain an "open-book culture" by making decisions transparent
and keeping employees informed, says Judith Bardwick, author of "One Foot
Out the Door." Cutting costs in such companies is a shared task. "Ideas
about how to do it trickle down from executives and percolate up from
employees. The honor of the organization is reflected consistently, even
in layoffs." In a Deloitte survey on ethics in the workplace, released
last week, 84 percent of respondents say that openness by leadership also
contributes to a more ethical workplace culture. But fairness is not
always easy. "Most of us would like to treat employees fairly, but
unfortunately we find it easier to treat people the same," regardless of
their performance, says Bill Catlette, cofounder of Contented Cow
Partners, business consultants in Collierville, Tenn. He once ruffled
feathers by singling out an employee who had not used any sick days in 15
years. He rewarded the man with an airline ticket to the Caribbean.
Although the ticket cost only $200, the gesture rankled a woman in the
human resources department. "She kept asking me what I was going to tell
other employees," Mr. Catlette says. Yet other employees were happy for
their colleague. He cautions, "If you treat stars and slugs the same, the
stars may stay, but they curtail their effort."
Fairness and layoffs The most successful companies and leaders frame
business not simply as a series of financial transactions but as a series
of relationships, says Clinton Korver, author of "Ethics for the Real
World." He adds, "The only way to build relationships is to treat people
well, especially during difficult times such as layoffs." Today many firms
offer outplacement services to help terminated employees find new jobs.
Sometimes the primary motive is to avoid litigation or promote the
company's image, but the result is to treat employees fairly and
compassionately, says Rachelle Canter, author of "Make the Right Career
Ronald Humphrey, professor of management at Virginia Commonwealth
University in Richmond sees a link between empathy and good leadership.
"Empathy can help you get the job done," he says. "It can help you
understand your employees and motivate them better." He points to Ukrop's,
a supermarket chain in Richmond known for outstanding service. "They get
that by treating employees right," Professor Humphrey says. "If you're
being treated badly by your own management, you're going to have to fake
the smile. Customers are good at picking up on inauthentic emotional
displays. If a manager is supportive and helps workers, they're going to
be in a good mood, and customers are going to respond to that." Yet
Humphrey cautions mana-gers against being "mindlessly empathetic" to
everyone. "Sometimes you have tough decisions to make. If an employee is
constantly tardy, is this an occasion to discipline or to show support to
meet personal needs? Sometimes the right solution would be to discipline
or terminate, if they can't do their job right." Whatever the challenge,
Catlette, the business consultant, finds reason for optimism. "The world
is less forgiving, less trusting, less innocent than it used to be, but
deep down, people are still pretty decent at the core," he says. "They're
trying hard. Miscreants in the boardroom get all the attention. People who
are stand-up citizens, who run a good clean business, never get heard
about. Organizations that treat people with respect and fairness and
concern grow faster, are more productive, and generate a lot more wealth."