Perceptions Of Fairness

Larry Price
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Wednesday - July 21, 2010
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There’s a lot of conflict in the world today because of perceived divergences of interest, or a belief the parties’ current aspirations cannot be achieved simultaneously. These people perceive incompatible goals and interference from each other in achieving their goals. Look around, such conflicts are everywhere.

In Europe there are conflicts between public unions and management, nations in conflict and communities challenging government agencies. The conflict is either interpersonal (between individuals people), intra group (families) or inter group (unions/management). It’s interesting to note that there is one word that almost always surfaces in the arguments and confrontations: fairness. Management is accused of not bargaining in “good faith,” or management is accused of not being fair to its employees.


You hear the response all the time: “What’s fair got to do with it?” Simply put, an awful lot, because there is more than one principle for distributing resources fairly. In Hawaii, generosity is important. It means that fairness is shown by one who makes the decision and usually “gives more than he/she takes.”

Equality is another important word, because fairness to a lot of local folks means splitting the gain “down the middle.”

Generosity is most important when building a relationship, while equality is important in long-term relationships. In a recent discussion with management and union officials over the important labor negotiations going on between Local 5 and the Sheraton Corporation, both parties were calling for “what was fair.” Appropriately, both parties interviewed had slight smiles on their faces, because they realize only a mutually beneficial settlement will probably be unequal or inequitable, especially if different standards of fairness are applied by the two sides. There is a self-serving bias that says, “The equity norm more often than not, looks right to the side who has contributed relatively more to the organization. In the hotel negotiations, seniority seems like a relevant input because of so many high-tenured employees, as do cultural differences between management and labor.

A couple of signals have already reared their ugly heads early on. Employees have shown a tendency to overestimate the likelihood that other people, such as arbitrators, will see fairness their way. Studies find that almost all parties entering arbitration are confident an arbitrator will share their view. An analogy to driving is helpful - studies find that most people think their driving is considerably above average.

A word of caution when using the “fairness” argument: “Don’t stake your strategy on the belief that your view of fairness will be shared by everyone.”

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