Thought Leadership: Same Old Story

Blanket policies and rigid reward schemes are out of date. For your business to succeed, you’ll learn that fairness now means treating everyone differently, says Tom Peck.

As the 21st century rapidly matures, it is already clear that it will be very different from the 20th and, if businesses want to succeed in this frighteningly dynamic new era, they will have to change their understanding of fairness.

In 1980, the influential American behavioural psychologist GS Leventhal set out six criteria for creating fairness at work. He proposed that procedures and policies should be consistently applied to everyone in the organisation, free from bias, accurate, correctable, representative of all concerns and based on prevailing ethics. If the rules are clear, and good work is uniformly and proportionately rewarded, workers will be happy.

But it isn’t 1980 anymore. Staff at successful companies, on the whole, are not working there merely to satisfy their basic needs for food and shelter. As such, the reward for good performance of an increase in what another US psychologist, Frederick Herzberg, called “hygiene factors” – pay, personal life, job security, status, suspension, working conditions, fringe benefits, company policies and administration, and good relations with co-workers – may not suffice. These factors, he argued, can only reduce dissatisfaction, not create satisfaction.

Only motivational factors – level of challenge, the work itself, responsibility, recognition, advancement, intrinsic interest, autonomy and opportunities for creativity – can stimulate satisfaction.

Much fanfare is made about the wild and wacky perks and privileges touted around at dotcom start-ups in California, and, increasingly, in the UK. At the Silicon Valley offices of user review site Yelp.com, three beer kegs sit in the break-room, with inbuilt iPads informing staff what brew is inside. Others boast chocolate fountains, indoor skating ramps, free freshly prepared gourmet meals and famously, at Facebook’s brand new offices, free soda for all.

“But the most valuable staff in the world don’t stick around for free soda,” says Professor Kit Yarrow, an expert in business psychology at California’s Golden Gate University. “They do for the opportunity to make a valued and dynamic contribution to the organisation. And with the complexities of modern working life, the sort of rewards people want for a job well done are decidedly different.”

Of course it is important that workers can be confident they will be justly rewarded for their endeavours, but in a diverse workforce not all staff want the same reward. Promotion, an increase in salary, the reward of flexible working – the valence of these motivating factors, i.e. their appeal to the specific employee to which they might be rewarded, varies widely from employee to employee. The increased workload or necessity of foreign travel that might come with a promotion is decidedly unappealing for many so it stands to reason that it’s just not fair to treat everyone the same.