As some executives have recently discovered, the fairness of employees’ experiences and a corporation’s mission and purpose are linked. Almost nine out of 10 Fortune 100 companies now list equity as one of their corporate values. Mentions of diversity, equity and inclusion (DEI) on S&P 500 earnings calls have increased 658% since 2018. And the chief purpose officer, an emerging C-suite position dedicated to societal, cultural and political issues, has been generating new buzz.
Despite this attention, the divide is growing between companies and workers. Of the 3,500 employees we surveyed worldwide, only 18% said they work in a high-fairness environment, as measured by how they believe their employer handles various aspects of the employee experience, such as talent management, promotion and pay. This finding is deeply troubling, not only for HR departments but the entire C-suite, as fairness affects the way an organization allocates resources, uses technology, communicates internally and externally, and makes decisions about strategy and risk. Perhaps most importantly, employees who see their experience as fair show up to 26% higher levels of performance and up to 27% higher levels of retention.
These data points, while concerning, should not suggest that employers have failed to act.
In fact, the opposite is true: Many organizations have established progressive recruiting and remuneration policies, taking care that no candidate or employee gains an unfair advantage over another in hiring, promotions and pay raises. Such policies help mitigate bias and inequity at important junctures in the employee life cycle. However, these moments only account for one-quarter of employees’ perceptions of unfairness. The rest happens in their day-to-day experience.
A truly fair employee experience isn’t only about well-crafted DEI initiatives for historically unrepresented employees. It’s about designing an employee experience that is fair to all employees. For instance, Donald Fan, senior director of the global office of culture, diversity, equity and inclusion at Walmart, told us: “A level playing field is not just for women or people of color; it’s for everyone. Everyone has the same starting point, the same resources, access to information and tools, and is also being invited to decision-making processes. That’s the environment we’re trying to build to make sure our white male associates don’t feel left behind. We will offer them the right tools to become allies and champions. We can’t afford for them to stand by and not be engaged in our journey.”
As Fan suggests, organizations need philosophies, not just policies. With the workforce becoming more diverse and physically stratified (e.g., fully remote versus in-office versus a mix of the two), it’s time to develop talent strategies that account for every employee’s unique circumstances. Think of it as an automatic door — an invention conceived specifically for people with limited mobility that benefits everyone.
Four Elements of a Fair Experience
Executive leaders should check the fairness of the work environment by considering these questions.
Are employees informed?
In their personal lives, employees can search online and instantly evaluate and compare the products, services and providers they use. Yet at work, they can’t easily find out how to get promoted or change career tracks, or whether to ask for a raise. In one survey by The Org, 70% of employees said they would take one job offer over another because one organization was more transparent.
The problem, more generally, is that organizations tend not to share too much information with employees: only 33% practice information transparency. In some cases, there is good reason for this. HR leaders, for example, worry about sharing sensitive information too broadly or giving employees too much information without proper context or guidance on how to use it.
But efforts to contain sensitive information are often fraught. For one, data often leaks out anyway — and unevenly. Male candidates are more likely than women to obtain advance information about the recruiting process, such as who will interview them or what kinds of questions they will be asked.
The recruitment process is also rife with such inequities. Employees who’ve been overlooked for pay raises often find out about the higher salaries of new recruits, while external candidates tend to learn more about pay scales than current employees during the hiring process. This lack of transparency fuels suspicion and resentment, which can lead to attrition.
The encouraging news is that some organizations are taking innovative steps to improve transparency in their talent processes. Procter and Gamble has made its interview questions available to all candidates online. Buffer, a social-media management platform, has made its product roadmap public, so everybody knows what everyone is working on. Gitlab has put its employee handbook online and allows employees to upvote and downvote specific policies. Cafcass — short for Children and Family Court Advisory and Support Service, which represents children in family court cases in England — shares performance data with employees and managers at the same time.
In each example, the organization provided two important additional components of transparency:
– Balance: The information is made available to all employees at the same time.
– Actionability: The information is augmented by helpful guidance on how to use the information.
Transparency with guidance leads to overall better fairness outcomes: More than half of the employees whose organizations provided both report a high-fairness experience.
Are they supported?
During the COVID-19 pandemic, employees have experienced unprecedented levels of burnout, fatigue, depression, anxiety and disruption to their work-life balance. In response, 64% of organizations have offered new well-being benefits, such as counseling services and self-care tools. Despite these initiatives, only 32% of employees say they feel supported at work.
Even more striking is the difference in perception between working parents and those without children at home. Thirty-seven percent of parents said they felt supported by their employer, compared with 27% of employees without children. Without a doubt, employers have done a lot to help working parents during the pandemic. At the same time, conflicts at high-profile tech companies made headlines last year and sparked a debate over whether policies meant to support parents were fair to others; some workers without children perceived they were being left to pick up the slack.
Resentment has also flared among in-office workers who asked about colleagues who were granted more flexibility (e.g., “Why do they get to decide where and when they work, but I don’t?”). Their envy is understandable, considering that 45% of employees with any type of flexibility said their job was good for their mental health and well-being, compared with just 26% of employees with no flexibility.
Employers should view this conundrum from a broader perspective. To be sure, they don’t have infinite capital resources to give employees every form of support they could ever want. On the other hand, not every employee wants or needs the same set of benefits or accommodations. It’s unfair to offer something to one group and not another, just as it is unfair to take support away from employees who need it the most.
The employee experience depends only partly on the investments the organization makes and largely on how the organization shapes perceptions of the experience. That doesn’t mean tricking or manipulating employees into thinking they’re getting support when they’re really not; it’s about helping them understand how everyone can benefit — them, their colleagues and the organization.
This framing involves three components:
– Tell the story: Be explicit about why HR is providing the support and how it will help the organization achieve its goals.
– Design for all: Wherever possible, design the support to be universal, even if it is primarily intended to benefit a specific segment of the workforce.
– Shape the comparison: Acknowledge that all employees are struggling in different ways and help them understand why different people need different things.
Are they considered?
When employees feel considered for opportunities they are qualified to pursue, more than one in two report a high-fairness experience. However, only 18% of employees feel that way.
Traditionally, organizations tread two paths to expanded opportunities: (1) asking managers to consider more candidates for promotions or growth opportunities and (2) encouraging employees to raise their own profiles. The first puts too much pressure on managers, who often default to hiring or promoting people they know can do the job, while the second puts too much responsibility on the employees themselves.
To strike a balance, the organization should take a page from innovative talent strategies that rely on employees to support their colleagues, such as peer networks, peer-to-peer development and coaching, and employees leaning in to help with each others’ workflows. Might there be a similar, peer-driven strategy for expanding access to opportunities? Just as most organizations use employee referrals to source new talent externally, why not leverage the power of employee referrals for internal opportunities as well?
Employees know more about what their peers are capable of than managers do, and a system to involve them can also combat perceptions that the organization offers better opportunities to external candidates than to current employees.
Take three steps to create an internal referral program that is fair and effective:
– Set expectations with employees that they will recommend their peers when they see opportunities emerge.
– Build mechanisms that help employees understand the workflows of other parts of the organization, so they can make sure those they recommend are qualified.
– Monitor the program to evaluate whether it’s producing the desired results.
Are they acknowledged?
Finally, employees need to feel that their contributions to the organization are noticed. Only 24% of employees said they felt acknowledged when we surveyed them in the summer of 2021. The rise of remote work has put distance between employees and managers and made it harder for managers to see and recognize the work their team members do. As the world moves toward a more permanent hybrid-working environment, this gulf will grow.
Employees who work in a remote or hybrid setting told us in May 2020 they were performing just as well as those who work in a shared office, if not better. Despite this, 64% of managers say those who come into the office are higher performers than remote workers, and 72% say on-site workers are more likely to be promoted. This bias can worsen gender inequality, as women are more likely than men to work remotely, if given the choice.
To overcome this challenge, HR leaders must find new ways to spotlight the contributions of all employees, no matter where or how they work. Remote employees generate a lot of data in their virtual interactions, revealing with whom they collaborate most, how often they interact with their colleagues and how much they participate in meetings. The future of employee evaluation will combine manager, peer and technological inputs to render a complete and more accurate — and fairer — picture of employee contributions.
As they incorporate technological inputs into performance evaluations to illuminate employee contributions, leaders must ensure that employees are partners in the process.
– Be comfortable with and consulted on the privacy implications of the technology their employer is adopting.
– Understand how the data will be collected, what it will be used for and how it relates to their work.
– Be aware of what behavioral changes will affect the evaluation’s results.
A New Fairness Philosophy
Combined, these steps allow companies to create employee experiences that are fair to everyone. The goal of this integrated framework is to guarantee that every employee feels informed, supported, considered, acknowledged and seen by their organization.
– Employers are putting an increasing emphasis on a fair employee experience, but only a small minority of employees say they work in a high-fairness environment.
– This is, in part, because employers have addressed key moments when nearly three-quarters of employees’ perceptions of unfairness are a result of their day-to-day.
– Executive leaders should check the fairness of the work environment by considering these questions: Are employees informed? Are they supported? Are they considered? Are they acknowledged?