Fairness in Leadership

“Due to organizational reasons, we have reduced our workforce by 20 percent. We have decided to lay off some of your colleagues. This allows us to reduce costs. The selection of the laid-off employees was random.”

Imagine finding this message in your email inbox tomorrow morning. You are among those who get to stay (or have to stay?).

How would you feel if there were no further communication from management?

Probably not great.

Would you consider this behavior antisocial or unfair?

Most people would.

That’s why today we’re examining the issue of fairness in everyday leadership.

Targetter Bootcamp


That’s Not Fair

“It’s not fair,” cries the football player when fouled by an opponent and the referee does nothing.

“It’s not fair,” we say when a colleague with two years less experience gets promoted while our career stagnates for no reason.

“It’s not fair,” colleagues say when management seemingly arbitrarily and opaquely lays off good colleagues in the neighboring department, making everyone wonder when their turn will come.

I assume you also want to be treated fairly.

But what is fairness anyway?


Fairness can be defined as:
1. Decent behavior and an honest and just attitude toward others
2. Behavior that adheres to the “rules of the game” in sports, displaying decency and camaraderie


Bootcamp Targetter


Fairness is a combination of behavior and attitude (in terms of mindset, beliefs, character). However, there is no reference to legally regulated behavior.

And this is a critical point regarding fairness and fair leadership:

The basis of fairness is not written down and clearly defined anywhere.

What one person considers unfair may be seen as “sportive” or “competitive” by another.

“We just don’t do that,” we often say when something is deemed unfair.

The tricky thing about unfair behavior is that it usually operates within and in between rules, collective agreements, and company policies.

We would immediately pounce on it and rightfully complain if it were illegal or non-compliant.

But when a leader acts unfairly, they usually adhere to all the written rules.

Except for the unwritten but extremely important rules of fairness!


Unfair Layoffs Impact the Productivity of Remaining Employees

Fair vs. Unfair Layoffs

Professor Matthias Heinz from the IWH – Halle Institute for Economic Research has examined fairness closely and conducted an intriguing study, from which the wording at the beginning of this article is derived.

“Due to organizational reasons, we have reduced our workforce by 20 percent. We have decided to lay off some of your colleagues. This allows us to reduce costs. The selection of the laid-off employees was random.”

No explanation.

No information on whether “random” was really random.

No appeal for understanding.

No instilling of confidence that we can now make it together.

No regret.

In the elaborate study, 200 people were hired as call center employees and worked two shifts. They did not know they were part of a study.

One shift worked normally without any layoffs.

The other shift was divided into three groups:

  1. One-third worked normally.
  2. In the second group, colleagues were informed (in a reasonable way) in the morning that the workforce had been reduced by 20%-
  3. In the third group, there was only the above antisocial message.

The result:

Among the employees who received this antisocial information and whose colleagues were laid off randomly, productivity dropped significantly. They made 12% fewer calls.

Study Fairness

The quality of work also declined:

The rate of calls that resulted in the desired conversation dropped by more than 20%.

That’s more than just “a bit of unrest.”

Some managers might say:

“What’s the problem with these employees? They still have a job. The others were the ones who suffered.”

But that’s wrong.

The remaining employees perceive the company’s behavior as antisocial and unfair.

This leads to emotional reactions and thoughts, such as:

  • Am I next to go?
  • How can I ensure I don’t end up on the firing list?
  • Was this just the beginning? Will there be more layoffs?
  • Did the laid-off colleagues do something to warrant their dismissal?
  • Where can I find another job?

These thoughts, triggered by unfair behavior, do not foster motivation or work quality.

Do all employees think this way?

Certainly not.

Which means that the performance of some employees has dropped by significantly more than 12%.

And why?

Because communication was handled poorly!

And this communication created an impression of arbitrariness and unfairness.

You can find more about it here: Measuring Indirect Effects of Unfair Employer Behavior on Productivity – A Field Experiment.

Fairness Targetter


Important When It’s Missing?

In the layoff study and the examples above, we saw negative situations.

Situations, in which unfair actions were taken.

And that’s where the factor of fairness came into play.

This leads to a hypothesis:

Do we only consider fairness when it’s absent?

Similar to how we take the freedom to leave our house anytime for granted and never think about it – until we suddenly protest vehemently because we (remembering COVID-19) can no longer just go anywhere and visit anyone. Because this “normal” freedom was taken from us.

I think: Yes!

Fairness is a factor that must be present within an acceptable range and is assumed without talking or thinking about it. When it is shaken, we react all the more strongly.


What Role Does Fairness Play for Leaders?

In the layoff study, we already saw the direct consequences of unfair leadership on employees.

And we haven’t even considered the laid-off individuals yet. They undoubtedly felt very unfairly treated, having been fired randomly.

Before we look at how you can lead fairly, I must note:

Leading fairly does not mean being weak or failing to take action because you don’t want to treat anyone unfairly.

Often, the opposite is true:

Because if no action is taken when, for example, some employees take more liberties than others, the other employees feel unfairly treated.


Which brings us to specific tips on how to lead your employees fairly:

  1. Always ensure that your communication includes at least a comprehensible reason for a tough decision.
  2. Avoid actions that create uncertainty about their future for employees, as this can be seen as unfair.
  3. When employees break rules, take action and ensure these rules are followed in the future. Otherwise, all other employees feel unfairly treated if they have to adhere to rules while one person can easily ignore them.
  4. The more transparency you create regarding the current company situation, competition, company performance, critical market factors, etc., the easier it will be to implement difficult measures such as restructuring, restructuring, or necessary reorganization for growth. This way, you can make decisions understandable and avoid seemingly unfair behavior.
  5. Do not abuse the power of your leadership role to enforce measures, but advocate for your approach internally. Not everyone will agree and be enthusiastic, but every “This is how we’re doing it now” carries the massive risk of perceived unfairness.
  6. Always keep Professor Heinz’s study results in mind and consider not only those who leave but also those who stay when making layoffs. Your internal communication will determine whether you suffer massive performance losses or not! This also applies to reorganizations, project stops, job relocations, department builds, hiring new employees at higher salaries, etc.

Conclusion: Fairness in Leadership

Leading fairly is not that difficult.

In my leadership seminars, I always conduct a survey at the beginning.

At a company undergoing massive restructuring, about 150 out of 200 top executives said that fairness was a particularly critical issue. They wanted to know how to be perceived as fair leaders by their employees because the management was communicating very sparsely and opaquely.

The more critical a professional situation is, the more you need to ensure clear and understandable communication – and make fair decisions.

You can be firm, but not unfair.

PS: Some people will see even the most comprehensible and logical decision as unfair if it affects them personally. However, they often say a few months later that while it was tough personally, it was also fair.

PPS: In some organizations, particularly those oriented towards power and status, fair-acting leaders are less often promoted than supposedly assertive (i.e., aggressively using their power) leaders. In such organizations, more attention is paid to the impression conveyed by the leader than to the medium- and long-term results achieved through their leadership (including employee satisfaction, motivation, innovation, loyalty, etc.).