During transformation processes, many managers keep their eyes on the goal i.e. the new corporate vision. In doing so, however, they easily lose sight of one decisive aspect, namely that change is ultimately carried out by the company’s employees. To a large extent, the successful implementation of a change program is dependent on them.
The best way to secure the buy-in of your employees is to follow the ‘Fair Process’ principle. In this blog post, you will learn what fairness means for effective change management and how the fairness factor helps you to successfully implement your transformation project.
Fair Process starts with a challenge that many business leaders have to overcome when initiating change. The question is often posed: How can we change work processes in a company without our employees feeling that changes are being forced upon them?
Many changes that a transformation process brings with it directly affect the employees of a company, impact their way of working and change the general set-up of their daily work.
If management implements innovations without involving employees in the change process, they quickly feel ignored and unappreciated. Such a breach of trust endangers the success of the transformation and can inflict far-reaching damage on the company.
Fair Process enables management to make comprehensive changes without compromising the trust of its employees. In change management, Fair Process consists of three principles:
According to Kim and Mauborgne (2003).
When it comes to fairness, many managers are of the opinion that fair conditions already prevail in their company. However, they often confuse two different aspects of fairness: Fair Process and Fair Outcome.
Fair Outcome refers to the remuneration that an employee deserves for their work, cooperation and good performance. This refers to financial resources, bonuses or a higher position in the organization. This principle is also called distributive justice.
Fair Process, otherwise known as procedural justice, works differently. If a change management process is carried out based on Fair Process principles, a solid relationship of trust and solidarity between the employee and management is forged. The employee’s opinion is heard and valued. This way, the employee voluntarily cooperates with those responsible, without additional incentives (i.e. fair outcome).
In their article “Fair Process: Managing in the Knowledge Economy”, W. Chan Kim and Renée Mauborgne provide fascinating insights derived from their study on the relationship between trust, the willingness to share ideas and corporate performance. The study revealed how strongly fairness affects change management processes.
When management made changes using Fair Process, employees supported the decision of those responsible in the majority of cases – even if they were not satisfied with the actual impact of the decision. This is because employees felt that the way the decision was made was ultimately fair.
When the reverse was true, this principle worked in exactly the same way: If employees were ignored by management during the decision-making process and were not informed in good time about the consequences of the transformation, they found the changes to be improper – even if they recognized the positive effects of the innovations and actually supported them.
The term “fair process effect” is used in this context. In short, it means that a person is more likely to accept an unfavourable decision (lack of distributive justice) if they consider the process that led to the decision to be fair (procedural justice).
Adopting a meaningful vision for your company and outlining practical steps on how to achieve it remain the decisive basis for a well-planned change management process. However, you ensure the success of your transformation by letting your employees participate in the decision-making process and giving them the opportunity to express not only their ideas, but also their worries and fears.
This does not mean, however, that ensuring a fair outcome is superfluous in change management. Distributive fairness in your company also creates job satisfaction, commitment and employee trust in other ways. You can implement changes far more easily, however, if you apply Fair Process, especially in change processes where you do not expect an improved outcome for your employees.
From cost minimization to improved performance, Fair Process shows its worth in a variety of organizational and personnel challenges. Without process fairness, even changes advocated by employees are often difficult to implement.
Fair Process enables managers to effectively implement changes even for unpopular decisions and difficult goals, while simultaneously receiving the willing support of the affected employees. Fair Process also reduces the cost of your change process by eliminating the need to create fairness through distributive justice (e.g. financial incentives) and by delivering change faster and more effectively.
Organizations that pursue process fairness are proven to be both more directly and indirectly appreciated by their employees. They can count on more support when introducing new strategies or changes. Fair Process also promotes a corporate culture that encourages commitment, innovation and idea sharing.
Behaviors and ways of thinking that de facto increase employee performance are also more prevalent. Employees in whom trust has been placed because of Fair Process tend to be more likely to exceed expectations and produce better results of their own accord. It is their personal desire to give their best, rather than simply doing the bare minimum.
Management has failed to ask employees for their opinions and has not granted them the opportunity to express their ideas and concerns. Changes that have a direct impact on the working conditions of employees have not been adequately communicated or justified.
For employees, a change process carried out under these conditions is a breach of trust. The willingness to cooperate and the motivation of employees decrease considerably as a result. Mistrust and the associated lack of commitment are a major, unrecognized problem in many organizations and significantly endanger the success of change processes.
An unfairly implemented change process can be considerably more expensive than a Fair Process. Once the trust of employees is lost, it is too late to initiate fair decision-making processes. In most cases, employees are no longer willing to cooperate. On the contrary, it is highly probable that the company will have to deal with complaints, or, in the worst case, with work stoppages and strikes.
Employees often demand not only that fair conditions be restored, but also want those who have violated their trust to be punished. In many cases, the demands go far beyond the costs that the company could have expected for the change under distributive justice.
Managers that consider Fair Process as a restriction on their ability to act should be aware that the consequences of unfairly implemented changes can cause significant financial damage to the company.
If the costs are too high for fair conditions to be restored through distributive justice, the company may have to cancel the change process altogether.
For us at TTE, fairness comes first, which is signified by our slogan “Creating Results Together”.
“The process fairness aspect of strategy development is triggering a movement throughout the company, and employees are highly motivated to participate in strategic initiatives that they themselves have introduced.” Lars Linnekogel
As a TTE founder and participant in the INSEAD Executive Master in Change Programs, Lars has a deep understanding of process fairness, especially in strategy development.
Find out more about successful transformation management. We would be happy to talk to you about the right change management process for your company. Get in touch!
TTE Strategy