Why Fair Treatment Is Such a Critical Leadership Practice

People want to be treated fairly. As a leader, it is very important to understand the role that equity and fair treatment plays in both motivating employees and retaining them.

The Equity Theory of motivation says simply that people are motivated by inequities. According to Equity Theory, employees bring inputs to the job (e.g., talent, skills, energy, time) expect to receive outcomes (e.g., pay, benefits, good working conditions and colleagues), and expect those to be equitable—in balance. For example, if employees believe they are being paid too little for their time and talents, they will either ask for a raise or start slacking off. If work rewards/outcomes are too meager, the employee may leave for a more “equitable” job elsewhere. Conversely, if an employee is highly regarded and praised by the leader, she or he will try to “prove their worth,” and will be motivated to work harder.

Suffice it to say that leaders need to be fair in their treatment of employees, but it’s not always easy. Why? Because people have different ideas of what’s fair. There are individual differences in how people respond to perceived unfairness.

Some workers are particularly sensitive to inequities. These individuals are “equity sensitives.” They become distressed when they believe they are under-rewarded and may feel guilt if over-rewarded. (Presumably, that guilt pays off in increased motivation, although not always.)

Other workers are givers, or “benevolents.” They are altruistic and are relatively content with receiving lower levels of rewards/outcomes for their work. Unfortunately, these workers can be exploited by leaders.

Finally, some team members are takers, or “entitleds.” They are concerned primarily with receiving high rewards, regardless of whether they earn them or not.

Of these three types of individuals, only the equity sensitives are routinely motivated by inequities.

What’s a leader to do?

It is critical that a leader be responsive to employees and understand their perspectives regarding equity. Leaders need to be aware that entitleds may never feel fairly treated, and should not take advantage of benevolents.

Regardless, leaders should develop reward procedures that are fair and objective and communicate those to all employees. By being transparent and honest in letting employees know how rewards are distributed and why, a leader can not only be seen as more fair but can also be an effective motivator for a substantial subset of workers.