Increasing the mental and physical wellness of employees represents a significant priority for organizations today. The importance of this pursuit is reflected in the fact that investing in wellness programs is now the norm for corporations. Happier and healthier employees are more productive and more likely to stick around. Many programs centre on things like mindfulness, access to yoga, healthy snacks in the kitchen, and other programming meant to foster healthy attitudes and behaviors. While research shows that such investments are worthwhile, an oft-overlooked factor in wellness programs is fairness.
Considerable amounts of research show that perceived unfairness at work can have both acute and enduring impacts on the wellness of employees. For example, one study showed that perceived unfairness led to elevated heart rate and blood pressure. Other research has shown an increased risk of long and frequent sick leave for those who feel they are treated unfairly at work.
While there are many ways unfairness can creep into company culture and affect wellness, selection and promotion have particular sway in setting the tone. Designing de-biased and objective processes to handle talent could lead to significant headway in making employees happier and healthier.
Hiring new talent with objective transparency
When hiring new people, companies run the risk of selecting candidates that are either difficult to work with interpersonally or are not qualified to fulfill the duties associated with their new roles. While bad hires certainly can hurt the wallet of an employer, a survey of CFOs shows that they are more concerned with the indirect costs to morale and productivity.
One rotten apple can spoil the bunch, and a toxic or manipulative employee can do significant damage to a corporate culture’s sense of fairness. Having incompetent employees in the mix can result in more senior and top employees picking up the slack. That can create an issue with top performers as they become frustrated in noticing that their counterparts or managers are putting in less but getting the same if not more in pay and recognition.
Promoting the best performers with objective data
When promoting people in the company, especially within organizations that have teams working together, there is often discussion about whether the individual that was promoted deserved the advance. Often, many are left feeling that things are unfair. Indeed, a study out of the UK found that 29% of employees surveyed think that promotion processes at their company are unfair. When favoritism or bias seep into the promotion decision, perceptions of unfairness are bound to rise — in addition to employee’s heart rate and blood pressure.
As human beings with human brains, managers in charge of promotion are not immune to the fallible systems of cognition and decision-making. Take one of these biases, called confirmation bias, which leads a person to focus on evidence that confirms prior beliefs and assumptions rather than finding evidence that contradicts it.
Let’s say a manager who has a great first impression with an employee early on, is facing the decision to promote them. The first few favorable interactions will cause the manager to inadvertently recall only those instances which confirm their initial stance (i.e., good performance worthy of promotion), and equally, fail to recall or at least justify the instances which contradict their initial stance (i.e., bad performance not worthy of promotion). Layer on top of that the herd mentality in manager team contexts, and you have a final decision tainted with subjective falsehoods and self-deception.
Where decisions are shrouded in subjectivity, other employees on the sidelines can only guess how such outcomes are being arrived at. That’s the moment where perceptions of unfairness creep in. And when that happens, the organization and its people are at serious risk.
The better, behavioral science approach for fairness
Given the detrimental impacts to wellness that come with perceived unfairness, and that hiring and promotion are the linchpin to organizational fairness writ large, these processes and systems need to be as objective and evidence-based as possible.
Traditional approaches to hiring and promotion hinge on human judgment. Committees and panels review resumes, talk to candidates, and use a variety of techniques to gain insight as to whether a new hire is qualified and a good fit, and more senior teams often engage in informal debates about the relative merits of each prospective ladder-climber. But as the confirmation bias example points out, our minds work against us even if we think we’re being fair and objective.
In hiring, we know that despite objective markers like general mental ability ranking as a top predictor of success, research has shown that a large majority of people involved in hiring have made decisions based on gut feelings. In promotion, we know that about half of the variance in managers’ ratings of performance is explained by the unique patterns of the rater and not connected to performance, a phenomenon called the idiosyncratic rater effect.
While blinded resumes and structured interviews can reduce some of the noise and lead to relatively less biased outcomes, we think that a more dramatic shift is needed to ensure the right people land in the right roles, preserving perceptions of fairness, and in turn promoting wellness.
In order to minimize unfairness, the best way forward is to limit the role of human decision makers and to instead rely on behavioral science research that informs the most useful behaviors, cognitive and personality variables, and measures of fit that best predict performance. Firms can adopt technology based solutions that collect the right data for each role, make hiring and promotion transparent (e.g., percentile ranking of scores against other applicants), which allow for organizational choices that are evidence-backed, objective, and ultimately, fair.
Improving mental and physical wellness of employees is critical. When the metrics underlying choices are transparent, objective, and evidence-based, and decisions from those metrics are removed from the biased hands – or minds – of humans, it signals to employees that the processes are fair and de-biased by design. This can go a long way toward ensuring that all employees feel that things are fair, which in turn could go a long way toward ensuring that all employees feel happy and healthy.