Want a Fair Workplace? Work at a Smaller Company

Want a Fair Workplace? Work at a Smaller Company

Data Shows Employees are Less Likely to Experience Fairness at Larger Companies

A valuable trait that small organizations have over large ones is that by virtue of their size, it's easier to build and foster trust (think more transparency, a tighter-knit community, less separation between hierarchical levels, etc.). And because trust is the defining component of great workplaces, this advantage is noteworthy.

We can see this phenomenon play out in the companies on last year's 50 Best Small & Medium Workplaces list (25-999 employees), where the most notable difference between these companies and their larger counterparts at last year's Fortune 100 Best Companies to Work For (1000+ employees) was the experience of a fair workplace – a critical element of trust.

Among the largest differences favoring small and medium companies were for the Trust Index© Employee Survey statements:

  • Promotions go to those who best deserve them (an average 87% of employees across Small & Medium Workplaces believe this is true at their company, versus 75% at the larger 100 Best)
  • People avoid politicking and backstabbing as ways to get things done (89% SMW vs. 78% 100 Best)
  • Managers avoid playing favorites (83% SMW vs. 73% 100 Best)
  • I receive a fair share of the profits made by this organization. (83% SMW vs. 73% 100 Best)

In short, among even the best workplaces, a smaller company is more likely to be experienced as a fair one.

As described in the Great Place To Work® Trust Model©, fairness is a key component of trust. At its heart, fairness addresses whether employees believe they are operating on a level playing field, and at Great Place To Work® we assess several key components of fairness:

  • Equity (fair pay and profit sharing; equal opportunities; fair treatment across job roles)
  • Impartiality (fair promotions; lack of favoritism)
  • Justice (fair treatment regardless of personal characteristics; feeling one has the right to challenge unfair decisions).

Perception vs. Reality

The difficult part about perceptions of unfair treatment is that they are often just that: perceptions. And not just any perceptions, but ones that are attached to deeply rooted feelings of self-worth within the human psyche.

Take favoritism as an example; this is an area of fairness that is very difficult to manage. Not only does it rely on each employee's own perception of complex workplace dynamics, but it is nearly impossible for managers to make every interaction with employees equal at all times. Couple this with the fact that management decisions around promotions and other personnel issues cannot always be transparent, and it becomes easy for perception to become reality – and for the experience of fairness to plummet.

Best Practices for Promoting Fairness

It's clear from our survey results that the Best Small & Medium Workplaces are able to foster a strong sense of fairness despite these challenges. After all, it's worth the effort: there's nothing more demoralizing than a sense of injustice at work. So, how do they do it? Through programs and practices that strive to promote:

1. Fair Profit Sharing

Example: Best Medium-Sized Workplace Centro employs a progressive compensation policy and a special team dedicated to Total Rewards, specifically to compensation. They look at every single every job, every year, and use compensation data from acclaimed compensation surveys in their niche industry to ensure fair pay. Fairness is not based on subjectivity, what projects employees have worked on, or how long they have been at the company, but based on the market data and what each individual's marketability is within a certain range.

2. Fairness in Promotions and Employee Development

Example: Best Small Workplace Insomniac Games created the "Career Path Matrix", which builds on an established career path document to help employees understand the requirements of each position or ladder in their career. The Career Path Matrix is an entire grid for each job family that not only provides basic responsibilities and educational criteria but outlines the key differentiating factors necessary to take the next step in a career path. This enables employees to work with their manager and with a career coach in HR to define a goal plan/path to promotion that is clear, measurable and attainable.

3. Transparency in Communication:

Example: After results from their engagement survey at Best Medium Workplace American Transmission Company identified the need for further clarification about compensation and rewards, their leadership team conducted focus groups to identify what employees did not understand about the process, giving employees a voice in the solution. Sixty employees in different roles were selected for the focus groups and a task force of supervisors was formed to review the programs and establish a plan going forward. Feedback from the focus groups was used inform training sessions about compensation and performance, and evaluate ATC's rewards and recognition programs.

Along with the other two pillars of trust: Leadership Credibility and Respect for Employees, these sorts of practices that promote a sense of fairness help to combat perceptions of favoritism and the need to politick. Most importantly, they generate a positive overall experience of the workplace among all employees.

And at the end of the day, that's what matters the most.

Is your small- or medium-sized business a Great Place To Work®? Apply today for the 2016 Best Small & Medium Workplaces list! Application deadline is June 18.