Favouritism hurts the balance sheet

The fact that favouritism in the workplace exists is not news, but in high-profile cases, it often makes the news. Two years ago, for example, Harry C. Stonecipher was forced to resign the presidency of aerospace giant Boeing over a relationship with a Boeing executive. More recently, World Bank president Paul Wolfowitz had to resign after being accused of arranging a big raise and promotion for a woman with whom he was having a relationship.

But as anyone who works in an office knows, favouritism isn’t confined to love and sex: Family relationships and office friendships can upset co-workers’ sense of propriety and fairness, too, and end up undermining an organisation’s performance. The dilemmas are acute in family-controlled businesses, when a founder choosing a successor must decide whether to favour a son or daughter or search outside for what may be better qualified managers.

“We know that unfairness leads to all sorts of problems,” says Wharton management professor Jennifer S. Mueller, whose own research has shown that organisations seen by employees as unfair in pay, promotion or other practices have higher rates of stealing, bad-mouthing and other damaging behaviours. Most relationship issues, however, are not as easily quantified. How do you measure the negative impact of office jealousies, perceived unfairness and favouritism?

In a paper titled, Does Perceived Unfairness Exacerbate or Mitigate Interpersonal Counterproductive Work Behaviors Related to Envy? Mueller and Yochi Chohen-Charash from City University of New York attempt to answer that question by presenting the results of two experiments designed to elicit envy and measure its impact on behaviour. The researchers say that their findings support the social exchange model of fairness — that is, the notion that fairness is based on the reciprocal exchange of resources, such that in fair situations, employees contribute resources to the organisation and the organisation reciprocates by rewarding employees.

According to the model, a situation in which employees receive fewer resources from the organisation than they believe their performance warrants will be perceived as unfair, and this leads to counter-productive work behaviour. When envy is added to the mix — say, because of a supervisor’s preferential treatment of one employee over another — the result is magnified. What would have been a negative interaction between the neglected employee and the organisation or his supervisor now becomes interpersonal, involving not only the employee and the organisation, but another co-worker as well.

Perceived unfairness and envy — the two primary ingredients in favouritism — are catalysts for a potential chain of behaviours that can negatively impact the company. Harming behaviours aimed towards envied employees — such as gossip or rumour-spreading — become a means of indirectly hurting the organisation, because eventually harming the envied other may affect the performance of the organisation and the morale and performance of the work group.

Moreover, when the researchers levelled the playing field during their experiment by removing the indicators of unfairness, they found that envy still had a negative influence. “Unfairness makes matters worse, but fairness doesn’t eliminate the negative influences of envy,” Mueller says. “That is why, as a manager, even if workers perceive that you are fair in your treatment and policy dealings with them, they may still engage in harming behaviours if they feel envious that someone else received a relatively good outcome.”

Related Article

Naughty, Naughty.

References

Cohen-Charash, Y., & Mueller, J.S. (2007). Does perceived unfairness exacerbate or mitigate interpersonal counterproductive work behaviors related to envy? Journal of Applied Psychology, vol 92, 666-680.

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