Perceptions on fairness and how organizations handle conflict can be a contributing factor to retention. Outcome fairness refers to the judgment that people make with respect to the outcomes they receive versus the outcomes received by others with whom they associate with. When people are deciding if something is fair, they will likely look at procedural justice, or the process used to determine the outcomes received. There are six main areas employees will use to determine the outcome fairness of a conflict:
- Consistency. The employee will determine if the procedures are applied consistently to other persons and throughout periods of time.
- Bias suppression. The employee perceives the person making the decision does not have bias or vested interest in the outcome.
- Information accuracy. The decision made is based on correct information.
- Correctability. The decision is able to be appealed and mistakes in the decision process can be corrected.
- Representativeness. The employee feels the concerns of all stakeholders involved have been taken into account.
- Ethicality. The decision is in line with moral societal standards.
For example, let’s suppose JoAnn just received a bonus and recognition at the company party for her contributions to an important company project. Another employee, Sam, might compare his inputs and outputs and determine it was unfair that JoAnn was recognized because he had worked on bigger projects and not received the same recognition or bonus. When we look at how our retention strategies are developed, we want to be sure they can apply to everyone in the organization; otherwise it may cause retention problems. Some of the procedures questioned could include the following:
- How time off is requested
- How assignments of the “best” projects are given
- Division of work
- Promotion processes
- Pay processes
While some of these policies may seem minor, they can make a big difference in retention. Besides development of fair policies, we should be sure that the policies are clearly communicated and any processes are communicated as well. These types of policies should be revisited yearly and addressed in the retention plan if it appears they are causing employee dissatisfaction.
In addition to a sense of fairness within the organization, there should be a specific way (process) of managing conflict. If the organization is unionized, it is likely a grievance process is already in place to handle many types of conflicts. We will discuss this process in greater detail in "Working with Labor Unions". There are four basic steps to handle conflict. First, the individuals in conflict should try to handle the conflict by discussing the problem with one another. If this doesn’t work, a panel of representatives from the organization should hear both sides of the dispute and make a recommendation. If this doesn’t work, the organization may want to consider mediation and, in extreme cases, arbitration. Inmediation, a neutral third party from outside the organization hears both sides of a dispute and tries to get the parties to come to a resolution, while in arbitration, an outside person hears both sides and makes a specific decision about how things should proceed.
Fortune 500 Focus
With over nineteen thousand employees in sixty countries, Google has seen its share of retention problems. 1 In late 2010, Googlers left the organization en masse to work for Facebook or Twitter. 2 Many who left were looking for pre–initial public offering (IPO) organizations to work with, something that Google couldn’t compete with, since it went IPO in April 2004. As a result of the high turnover, Google put its mathematical algorithms to work to determine which employees were most likely to leave, allowing HR to determine what departments to focus on in their retention plans. In 2011, Google gave every employee a 10 percent pay raise, and it continues to offer a variety of new and old perks, such as free food in any of its cafeterias, 20 percent of time to work on personal projects, and $175 peer spot bonuses. Google also offers free laundry services, climbing walls, tuition reimbursement, child-care centers, financial planning classes, and matching funds (up to $3,000 per employee) to nonprofit organizations. For all this, Google ranked number four on Fortune magazine’s list of 100 best companies to work for in 2011. 3 Some say it isn’t the perks, high pay, or bonuses but the company culture that Google creates. A weekly all-hands meeting with the founders, where people are encouraged to ask the founders questions, and a team focus meeting where everyone shares ideas are examples of the company culture Google creates. Google exemplifies the importance of culture in retention of employees.