Why Fair Bosses Fall Behind
2
ILLUSTRATION: GREG MABLY More employee promotions still take effect in January than in any other month—but other months are gaining ground. According to a LinkedIn analysis of the résumés of its 90 million members globally, almost 17% of all 2010 promo- tions occurred during January. That’s a marked decrease from the 1990s, when the figure was as high as 25%. LinkedIn declined to speculate on what’s caused the shift, but here’s one hypoth- esis: As businesses operate more quickly, they’re less apt to wait for calendar breaks to let promo- tions take effect. Batia M. Wiesenfeld is a professor and Sara L. Wheeler-Smith is a doctoral student at New York University’s Stern School of Business. Naomi B. Rothman is an assistant professor at the University of Illinois at Urbana-Champaign. Adam D. Galinsky is a professor at Northwestern University’s Kellogg School of Management. I n management, fairness is a virtue. Nu- merous academic studies have shown that the most effective leaders are gen- erally those who give employees a voice, treat them with dignity and consistency, and base decisions on accurate and com- plete information. But there’s a hidden cost to this behav- ior. We’ve found that although fair manag- ers earn respect, they’re seen as less power- ful than other managers—less in control of resources, less able to reward and punish— and that may hurt their odds of attaining certain key, contentious leadership roles. Our research, which included lab stud- ies and responses from hundreds of corpo- rate decision makers and employees, began with the age-old question “Should leaders be loved or feared?” We went a step further, asking, “Can you have respect and power?” We found that it’s hard to gain both. Consider Hank McKinnell and Karen Katen, two rising stars at Pfizer during the 1990s. McKinnell, who’d served as CFO and run the company’s overseas businesses, was known for his assertive negotiating style and no-nonsense, occasionally abra- sive manner. Katen’s performance had also won her numerous promotions, and she headed Pfizer’s primary operating unit. She treated subordinates and colleagues with respect and was respected in turn. In 2001, when it came time for a new CEO, the two were among the top candi- dates. McKinnell was chosen. One analyst told Bloomberg, “[Hank] is the right guy for the job…he’s got a toughness about him.” We heard this attitude expressed in a range of industries. Decisions about high- level promotions most often center on per- ceptions of power, not of fairness. The same bias was exhibited by stu- dents in a laboratory setting. Each wit- nessed a “manager” telling an employee about a compensation decision. Manager A communicated the decision rudely, Man- ager B with respect. The students were then assigned to work in a group led by the manager they’d observed; afterward they rated their leader’s power. Rude Manager A consistently scored higher than respect- ful Manager B—even though there was no difference in how they’d treated the par- ticipants themselves. Simply having wit- nessed the rude and respectful behavior was enough to create the bias. We’ve long wondered why managers don’t always behave fairly, because doing so would clearly benefit their organiza- tions: Studies show that the success of change initiatives depends largely on fair implementation. Our research suggests an answer. Managers see respect and power as two mutually exclusive avenues to influ- ence, and many choose the latter. Although this appears to be the more rational choice, it’s not always the correct one—and it poses big risks for organiza- tions. At Pfizer, a cohort of promising ex- ecutives associated with Katen resigned after McKinnell took over. He himself was pushed into retirement by the board in 2006 because of the company’s disappoint- ing performance. Shareholder outrage over his rich retirement package followed. Companies can benefit from placing more value on fairness when assessing managerial performance. Our early follow- up research suggests that managers whose style is based on respect can gain power. Their path upward may be difficult, but it’s one worth taking, for their company’s sake as well as their own. HBR Reprint F1107B Why Fair Bosses Fall Behind MANAGEMENT by Batia M. Wiesenfeld, Naomi B. Rothman, Sara L. Wheeler-Smith, and Adam D. Galinsky WHEN CAN FAIR BOSSES GET AHEAD? Managers whose style is based on fairness can still gain power under the following circumstances: When they cultivate a reputation for ethics and morality When the organizational culture is highly cooperative When they are going for positions that are relatively uncontentious and that draw on their mentoring and collaborative skills Stat Watch DAILY STAT To receive HBR’s Daily Stat by e-mail, sign up at www.hbr.org/ dailystat. The Rise in Year-Round Promotions FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 7.5% 8.8% 10.1% 8.5% 8.7% 10.4% 8.4% 8.6% 7.2% 4.6% 0.01% 16.9% 22.9% JAN AVG, 1991– 1999 HAVE QUESTIONS OR COMMENTS? The authors will respond to reader feedback at hbr.org. 26 Harvard Business Review July–August 2011 IDEA WATCH HBR.ORG
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Transcript of Why Fair Bosses Fall Behind
ILLU
STRA
TIO
N: G
REG
MAB
LY
More employee promotions still take eff ect in January than in any other month—but other months are gaining ground. According to a LinkedIn analysis of the résumés of its 90 million members globally, almost 17% of all 2010 promo-tions occurred during January. That’s a marked
decrease from the 1990s, when the fi gure was as high as 25%. LinkedIn declined to speculate on what’s caused the shift, but here’s one hypoth-esis: As businesses operate more quickly, they’re less apt to wait for calendar breaks to let promo-tions take eff ect.
Batia M. Wiesenfeld is a professor and Sara L. Wheeler-Smith is a doctoral
student at New York University’s Stern School of Business. Naomi B. Rothman is an assistant professor at the University of Illinois at Urbana-Champaign. Adam D. Galinsky is a professor at Northwestern University’s Kellogg School of Management.
In management, fairness is a virtue. Nu-merous academic studies have shown that the most eff ective leaders are gen-
erally those who give employees a voice, treat them with dignity and consistency, and base decisions on accurate and com-plete information.
But there’s a hidden cost to this behav-ior. We’ve found that although fair manag-ers earn respect, they’re seen as less power-ful than other managers—less in control of resources, less able to reward and punish—and that may hurt their odds of attaining certain key, contentious leadership roles.
Our research, which included lab stud-ies and responses from hundreds of corpo-rate decision makers and employees, began with the age-old question “Should leaders
be loved or feared?” We went a step further, asking, “Can you have respect and power?” We found that it’s hard to gain both.
Consider Hank McKinnell and Karen Katen, two rising stars at Pfi zer during the 1990s . McKinnell, who’d served as CFO and run the company’s overseas businesses, was known for his assertive negotiating style and no-nonsense, occasionally abra-sive manner. Katen’s performance had also won her numerous promotions, and she headed Pfi zer’s primary operating unit. She treated subordinates and colleagues with respect and was respected in turn.
In 2001, when it came time for a new CEO, the two were among the top candi-dates. McKinnell was chosen. One analyst told Bloomberg, “[Hank] is the right guy for the job…he’s got a toughness about him.”
We heard this attitude expressed in a range of industries. Decisions about high-level promotions most often center on per-ceptions of power, not of fairness.
The same bias was exhibited by stu-dents in a laboratory setting. Each wit-nessed a “manager” telling an employee about a compensation decision. Manager A communicated the decision rudely, Man-ager B with respect. The students were then assigned to work in a group led by the manager they’d observed; afterward they rated their leader’s power. Rude Manager A consistently scored higher than respect-ful Manager B—even though there was no difference in how they’d treated the par-ticipants themselves. Simply having wit-
nessed the rude and respectful behavior was enough to create the bias.
We’ve long wondered why managers don’t always behave fairly, because doing so would clearly benefit their organiza-tions: Studies show that the success of change initiatives depends largely on fair implementation. Our research suggests an answer. Managers see respect and power as two mutually exclusive avenues to infl u-ence, and many choose the latter.
Although this appears to be the more rational choice, it’s not always the correct one—and it poses big risks for organiza-tions. At Pfizer, a cohort of promising ex-ecutives associated with Katen resigned after McKinnell took over. He himself was pushed into retirement by the board in 2006 because of the company’s disappoint-ing performance. Shareholder outrage over his rich retirement package followed.
Companies can benefit from placing more value on fairness when assessing managerial performance. Our early follow-up research suggests that managers whose style is based on respect can gain power. Their path upward may be diffi cult, but it’s one worth taking, for their company’s sake as well as their own. HBR Reprint F1107B
Why Fair Bosses Fall BehindMANAGEMENT by Batia M. Wiesenfeld, Naomi B. Rothman, Sara L. Wheeler-Smith, and Adam D. Galinsky
WHEN CAN FAIR BOSSES GET AHEAD?Managers whose style is based on fairness can still gain power under the following circumstances:
When they cultivate a reputation for ethics and morality
When the organizational culture is highly cooperative
When they are going for positions that are relatively uncontentious and that draw on their mentoring and collaborative skills
Stat WatchDAILY STAT To receive
HBR’s Daily Stat by e-mail, sign up at www.hbr.org/dailystat.
The Rise in Year-Round Promotions
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
7.5%8.8%
10.1%8.5% 8.7%
10.4%
8.4% 8.6%7.2%
4.6% 0.01%
16.9%
22.9%
JAN
AVG, 1991–1999
HAVE QUESTIONS OR COMMENTS? The authors will respond to reader feedback
at hbr.org.
26 Harvard Business Review July–August 2011
IDEA WATCH HBR.ORG
1217 JulAug11 IW layout.indd 261217 JulAug11 IW layout.indd 26 6/7/11 12:29:02 PM6/7/11 12:29:02 PM
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