A new argument in business is arising, that playing fair pays off.
Arguably, just as well as it does in life.
David Bodanis published a new book, ‘the Art of Fairness’ which illustrates the power of decency that employers could display in order to ensure they have more productive workers.
Using the example of The Empire State Building, constructed in only 13 months, demonstrates a concept known as ‘efficiency wages’. By going that extra mile to treat their workers’ better than normal (looking out for workers safety, paying employees on days when conditions weren’t fit to work, providing hot meals on site), creates an atmosphere of care. With this fair treatment, it’s not only possible to attract more motivated and skilled staff, but it also gives them a platform to suggest improvements that could increase efficiency. With this community of care comes this feeling of reciprocity and openness, allowing workers’ to tend to the quality and productivity of the project.
Bodanis contrasts this to Eastern Air Travel, who in the 1980s cut wages and alienated their staff, eventually leading to the workers going on strike and the company going bankrupt.
Going back to the basic factors of production, one of them being labour. If you are unable to employ your labour efficiently — the maximum possible output won’t be reached and profit won’t be maximised. By being treated as less, workers may lose motivation in their work along with their enjoyment. According to Mihaly Csikszentmihalyi, a Hungarian psychologist, enjoying your work is the most important factor for reaching a ‘state of flow’, where you are essentially ‘in the zone’, operating at optimal concentration. Without this pleasure, it will have knock on affects on companies. They will either experience a high level of staff turnover or experience a knock in their quality and quantity of production. With both, profits will be lost as recruitment costs will rise and profits will decrease (as worse quality leads to less demand and less output will mean less units are sold).
This emphasises even further why businesses should pay fairly and treat employees with respect and decency. In the case of Danny Boyle organising the 2012 London Olympic opening ceremony, he demonstrated one of the most important traits of good leadership: a willingness to listen. He listened to their ideas for improvements and trusted them to keep the surprise rather than force them into a non-disclosure agreement. Another coined concept known as the “power distance” — with a low power-distance score, it shows that senior staff are willing to listen to more junior staff.
The ending message is that although ruling with fear and cruelty may work in the short-term, in the long run — being humane will always trump it.
Article: Why fair play pays
