Why Fairness (and Not Power) Can Boost Profits for a Manager

(By Dan Simmons)

These days, everybody is trying to do more with less—fewer employees and fewer resources, but more profit.  However, according to a recent experiment, the way for a manager to gain more profitability from their employees is not to wield power, but to be perceived as being fair.

That experiment, conducted by New York University’s Stern School of Business and Cornell University’s Johnson School of Management, showed that managers can let power “go to their heads,” so to speak, when pressured by their superiors to focus more on the bottom line.

As a result, managers become more preoccupied with things like headcount, expenditures, overhead, the department’s budget, etc.  In short, they begin to focus more on the power they possess to make decisions that will theoretically boost profits bottom line.

Unfortunately, that approach can end up not only NOT helping the manager achieve their goals, but it might even be counterproductive or harmful in the long run.

Anita Bruzzese of Gannett interviewed one of the authors of the report associated with this experiment, Steven Blader, an associate professor of management and organizations at NYU.  Her interview and article (recently published in USA Today) puts forth the notion that instead of focusing on power, managers should instead focus on fairness.

Why is that?

Because the most important factor in a department or company achieving higher levels of productivity, which leads to more profit, is the team of people involved.

With that in mind, you can more easily engage the members of your team if they perceive that you’re treating them fairly.  Engagement, in turn, leads to empowerment, and according to Bruzzese’s article, empowerment leads to the two things that every manager wants.

Those two things are collaboration and innovation.

However, if the members of your team do NOT perceive that you’re treating them fairly, they’re more likely to “shut down.”  Consequently, they won’t share their ideas, they won’t work with other team members, and they won’t be engaged.  The result?  Less innovation, which equals less profit.

How engaged are your employees?  Do they perceive you as somebody who makes fair decisions?  Should they?  Do they offer creative ideas and strive for collaboration and innovation?  These are questions that every manager should ask in the quest for more growth and greater profits.

If you have any questions about this topic or about how I can help you to recruit, reward, and retain the best talent possible, please contact me at dan@consearch.com.

 

, , , ,

No comments yet.

Leave a Reply