EQUITY and EQUALITY Are Not the Same Things ...

One of the predominant influences on employee engagement—defined here as the 'decision' to contribute discretionary effort toward achieving individual and/or organizational goals—is the perceived fairness of the rewards (or the lack thereof) received from one's previous efforts. And by "rewards" I'm not just referring to money; a great deal of employee motivation is derived from non-financial rewards such as appreciation, further development, and advancement.

Feelings of unfairness are the result of a simple compare/contrast equation; employees compare what they get from their work, relative to what they give, and then compare it with what (they perceive) their peers are getting doing similar or comparable work. This comparison is also frequently done with peers doing similar or comparable work in other organizations.

When employees feel that they receive a fair and equitable return, commensurate with their efforts, they then feel satisfied and motivated, which leads to higher performance. Equity, or fairness, is based on a very logical argument—that rewards should be based on merit—and that is an 'earned' right, not an 'owed' right. In essence, equity is not the same as equality; equality is based on the idea that everyone should be treated the same regardless of effort/results. I would argue that a company looking to build and foster engagement among their employees, as well as encourage strong leadership, should consider adopting a meritocratic approach.

Here is a short list of some of the key areas that employees may use in establishing their 'value' within their compare/contrast equation:

• The amount of effort the employee contributes.
• The quality and impact of the individual's performance.
• The education, work experience and tacit knowledge the employee possesses.
• The content and complexity of their current role.

When employees feel they aren't rewarded fairly (based on the above list), this can lead to dissatisfaction, low motivation, and ultimately, lower engagement. Unfortunately, if this feeling is strong enough, it can also lead to aggressive behavior, theft, cybercrime, and lawsuits (among other maladaptive behaviors).

High Value Activity (HVA) Action Steps

This week (starting today), look for ways to ensure that employee rewards—at least the ones you can control—are rooted in principles of fairness, equity, and merit. These HVAs might help:

• Behaviors Speak the Truth: Your behaviors are critical. Both small and big actions make a difference to the perception of fairness. Employees observe who gets what; no matter how big or small the reward or punishment. Perceptions of injustice can be reduced by using specific milestones and metrics that are visible and objectively assess performance (quality and quantity).
• Perception Becomes Reality: Pay attention to perceptions because no matter how fair we try to be as managers, it's employees' perceptions that matter. Try to maintain a 'pulse' on employees' feelings by observing the language used and the behaviors exhibited. A sense of urgency in their actions, contributing during meetings, collaborating with team members, taking initiative, and caring about the customer (both internal and external) and the quality of one's work, are all indicators of an equity-based perception.
• Create a Culture of Listening (see CORE Bites #58): None of us is as smart as ALL of us—it's important to recognize that no one person has ALL of the answers. In a meritocracy, great leadership is not about having great ideas, it is about ensuring the best ideas emerge. As managers, we need to set the tone of the workplace and encourage an environment that promotes listening and sharing. It's impossible to have an equitable work environment if ideas are not allowed to surface and flow freely.