In today’s politically correct world, many “pundits” promote the convenient, but simplistic, notion that equal and fair treatment is the same. The stated equivalence of the terms fits neatly into short sound bites that on the surface seems reasonable. Unfortunately, adopting that approach can have major, negative consequences for a business. The following example, as described in article, 4.040304, “Fair versus Equal,” illustrates the fallacy of this argument. Suppose that a company adopts a position that each sales rep will be paid at the same commission rate for sales in their territory. On the surface, this may appear to be a reasonable model. However, what if one sales rep is calling on a large number of customers in an established territory while another is attempting to establish an initial market presence in a new market? As another example, one sales rep might have New York City as their territory while another might have southern Iowa. The tables will quickly turn if the sales reps are selling briefcases or selling farm implements. The fair versus equal treatment fallacy breaks down because situations are rarely equal. The phrase “with all things being equal…” seldom reflects reality.
As the CEO, you must insist that the distinction be made and all relevant factors considered during all decision processes. In establishing company policies or dealing with employees on a daily basis, the fair versus equal dilemma can constantly occur. Complicating the situation are many well-intended government regulations that attempt to right past wrongdoings with their equal treatment demands that unrealistically do not take into account the fact that truly equal situations rarely occur. These differences can involve employees, pricing, competitive positioning, as well as a number of other areas.
In the final analysis, fair is far more important than equal. However, fair treatment usually involves the consideration of multiple factors that may not be obvious to an outsider or casual observer. The sales commission example previously given illustrates that point. To an outside observer, setting different commission rates would appear to treat individuals unequally. Digging deeper would provide sound reasons for such “inequality.”
Clearly, it would be impractical to explain to everyone all of the factors that were taken into consideration for every decision that is made. However, over time, with consistent application of a fairness decision process, it will become an accepted part of a company’s culture. It is a fundamental tenet in building trust throughout the organization.
