The power of fairness: The currency for success in corporate culture and economic transaction.

  • 24 Feb 2024
  • 3 Mins Read
  • 〜 by Shammah Sirima

Fairness is a fundamental aspect of human behaviour that goes beyond simple transactional interactions. From psychological experiments to legal rulings and corporate governance, the concept of fairness influences decision-making in various spheres of life, including corporate. Fairness plays a crucial role not only in personal interactions but also in professional environments, shaping corporate cultures and influencing decision-making processes. Explore the multifaceted role of fairness in interpersonal interactions, workplace dynamics, and economic transactions.

Fairness in the workplace

In organisational settings, fairness is a critical factor that influences employee attitudes, performance, and overall organisational effectiveness. Especially considering the future of the workforce is a much younger generation with different expectations than the norm. Managers must navigate fairness concerns across various domains, including recruitment, performance management, promotions, and compensation.

Fairness in the workplace encompasses.

  1.     Distributive fairness, which concerns the allocation of rewards and resources.
  2.     Procedural fairness, which pertains to the fairness of decision-making processes.

Employees evaluate fairness based on perceptions of equity, consistency, transparency, and voice in organisational decisions.

Moreover, recent legal cases, such as challenges to executive compensation packages, highlight the importance of fairness in corporate governance and stakeholder relations. These cases underscore the need for organisations to align compensation practices with principles of fairness and accountability to avoid reputational damage and legal scrutiny.

Fairness in economic transactions

Fairness also plays a crucial role in economic transactions, shaping consumer preferences, market dynamics, and regulatory policies. Consumers exhibit a strong aversion to perceived unfairness in pricing practices, resisting price increases during periods of high demand or emergencies.

Public support for anti-price-gouging legislation reflects societal expectations of fairness in economic exchanges. However, the effectiveness of such regulations remains subject to debate, with economists often highlighting potential unintended consequences, such as exacerbating shortages or stifling market efficiency.

The COVID-19 pandemic further underscored disparities in access to economic opportunities, remote work, and essential goods and services, highlighting the intersection of fairness with broader societal and economic inequalities. Addressing these disparities requires comprehensive policies and initiatives aimed at promoting economic inclusion, social justice, and equitable distribution of resources.

Navigating fairness in decision-making

Navigating fairness in decision-making requires balancing competing interests, values, and perspectives. Decision-makers must consider both the substantive outcomes of their decisions and the fairness of the processes used to arrive at those outcomes.

Transparent communication, stakeholder involvement, and procedural safeguards can enhance perceptions of fairness and legitimacy in decision-making processes. Organisations that prioritise fairness in their operations are more likely to foster trust, engagement, and commitment among employees, customers, and other stakeholders.

By embracing fairness as a guiding principle, decision-makers can contribute to the creation of more ethical, sustainable, and resilient organisations and societies.

 Fairness in human interactions

Psychological studies consistently demonstrate that humans possess an innate sense of fairness, which influences their behaviour in various social interactions. These experiments often involve scenarios where individuals are presented with choices regarding the distribution of resources, such as money or goods. What researchers consistently find is that people tend to reject unequal offers, even if it means sacrificing personal gain. This phenomenon, known as inequity aversion, highlights the importance of fairness in shaping human interactions beyond mere economic transactions.

Moreover, fairness considerations extend beyond material possessions to encompass basic needs and social norms. For instance, Nicholas Wright’s study at University College London, where participants rejected offers of water if they perceived them as insufficient, illustrates how fairness influences decisions related to fundamental physiological requirements.

Understanding the role of fairness in human interactions provides insights into social behaviours, cooperation, and conflict resolution. It underscores the significance of equitable treatment and mutual respect in fostering positive relationships and societal cohesion.

In conclusion, fairness is a fundamental aspect of human behaviour and social interaction, with far-reaching implications for interpersonal relationships, organisational dynamics, and economic transactions. Recognising and prioritising fairness in decision-making processes is essential for promoting justice, equity, and social cohesion in diverse contexts. Is the consideration of fairness in a corporate society a sustainable solution as currency for a new generation of employees? Or will the current reality force future generations to assimilate?