One Secret to Avoiding Lawsuits: Be Fair

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Oct 29, 2019

It’s hard for HR managers to build up leaders and teams when they’re constantly dragged down by energy-sucking lawsuits against their companies.

Recently, I sat down with the VP of HR for one of the Midwest’s biggest hospitals. We’d planned to talk about increasing the effectiveness of his core leadership team, but he was distracted. His hospital was being sued by three different employees for three different reasons, and he was devoting roughly 40% of his working hours to managing the constant onslaught of highly technical (and increasingly aggressive) information requests.

Unfortunately, this overburdened (and burning out) hospital VP is not alone. A 2005 survey found almost 90% of U.S. companies juggling multiple lawsuits. The healthcare sector alone experienced a 27% increase in litigation between 2017 and 2018, mostly in labor disputes. The question is, as we become a more litigious nation overall, can you do anything to de-escalate conflict and decrease the number of lawsuits brought against your specific workplace?

I believe you can.

Fairness as cultural value

Employees pursue litigation against companies for many reasons. Yet, the arguments that stick and progress into full-blown lawsuits do so for only one reason: a violation of core values. In his recent piece “14 Years After the ‘Hate HR’ Article, Have You Become Strategic?”, Paul Mastrangelo hit this particular nail squarely on the head:

“HR should be knocking on the CEO’s door to say that they aren’t just a tool to reduce litigation or stop bad behavior. That the real goal is to use data and collaboration to create a cultural shift, so that all employees feel like they are being treated fairly.”

Building a fair culture in order to head off lawsuits altogether? I couldn’t agree more. Fairness is a core human value, and like every other value, our fundamental need for it shows up while we’re still in diapers. As we grow, our perspective about fairness may broaden and lengthen, such that we’re able to handle getting “our fair share” eventually instead of immediately. Yet, no matter how old we get or wise we become, each of us is still hardwired to be treated – and be supported to treat others – with fairness.

How can you build a “fair” workplace culture, in which people are not only non-litigious, but actually purposeful, positive, and productive because they feel seen, heard, validated?

What does “fairness” mean?

In my experience, the most efficient, effective, and energizing way to build a fair workplace culture is to craft an “Organizational Constitution” that puts each of your core values – including fairness – in charge of every decision that gets made within and with your company. An organizational constitution is a “we the people” approach to culture building; it’s a collaborative, transparent process in which your top executives, middle managers, and front-line employees articulate your company’s core values in behavioral terms so they are clearly understood and able to be followed.

Is there a hidden cost to managerial fairness? See “Fairness in Leadership: It’s Usually a Plus, But It May Not Get You Promoted.”

What do “fair” projects and workflows look like? What is fair collaboration? What constitutes fair compensation, a fair performance review, and fair upward mobility within the company? Within your multi-generational workforce, what are the behaviors people can practice to ensure an equitable working environment, across the board, in every division and at every level in your company?  Values can mean very different things to different people. An organizational constitution supports you to put intangible values like “fairness” in quantifiable, measurable terms, and then link those values to your servant purpose, overarching strategy and specific business goals. To lay the foundation for its effectiveness, you can position your completed organizational constitution for public signing by every employee, from part-time help to the CEO.

Modeling fairness

Once you’ve set the bar high for fairness in your workplace, how do you ensure that people actually behave transparently and altruistically with one another? Setting the tone must begin with your senior leadership team, especially those who are most experienced (and sometimes most stubborn).

Your executives may need coaching, to help them understand how to model and champion your servant purpose, values, and valued behaviors. Making “fair” decisions inside the company can be challenging when tough market conditions are pressing in hard from the outside. Yet, aligning the behaviors of your senior leaders with your new organizational constitution is critical. Without their public, consistent buy-in, you can’t expect compliance from middle managers or front-line employees.

When followed, your organizational constitution inherently lays a foundation of fairness throughout your company.

It’s not easy

Instituting a fair, transparent, and productive culture is not a one-and-done exercise. Maintaining and strengthening values-aligned decision-making takes commitment and continual refinement. This becomes truer with each passing year, as employees’ expectations of fairness and transparency get higher while competition in the marketplace gets fiercer. You’ll need to continuously refine your assessment protocols to ensure that your culture refinement initiative remains effective.

Full disclosure: You will invest a great deal of time, energy, and mind-power in cultivating your fairness-focused, values-driven culture. You’ll conduct consistent pulse surveys, quarterly assessments, and strategic workshops designed to pinpoint and redirect unfair, values misaligned behaviors. You’ll provide a great deal of 1:1 and small-group coaching at every level of your company. Shifting human behavior is no small feat. You will grow, professionally and personally. Sometimes, this growth will be uncomfortable or even painful.

Do you know what else is uncomfortable and painful? Soul-sucking labor lawsuits, because your employees feel that you culture is fundamentally unfair.

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