Chicago Booth Review Podcast How Unfairness at Work Can Lead to Sabotage

Lucia Annunzio: To be perceived as fair, it's about telling the truth. It's about explaining why things happen. It's about treating people like they have a brain. Fairness is telling why. Fairness is not treating everybody the same.

Hal Weitzman: Do you get treated fairly at work? Have other people been promoted ahead of you or been given bigger pay raises even though they didn't deserve them? Welcome to the Chicago Booth Review podcast, where we bring you insights from some of the world's top management thinkers. Many of us think that our workplaces are not fair managers favour some employees over others. Give some people credit that's due to someone else. And Chicago, Booth's, Lucia Annunzio warns that that can lead to resentment and even acts of sabotage. So how important is fairness and how can you create an environment where people respect that and understand decisions even if they don't like or agree with them? Lucia, welcome back to the Chicago Booth Review Podcast.

Lucia Annunzio: Thank you very much for having me back, Hal. I appreciate it.

Hal Weitzman: Now, I invited you back because I know that you have something very intriguing that you teach in your class called the Capuchin or Capuchin Monkey Effect. What is the Capuchin or Capuchin Monkey Effect?

Lucia Annunzio: Okay, well, that's kind of a play on words, but as I mentioned in the last podcast, I've run focus groups in 28 different countries all over the world, and I have loads of data and we transcribe all of our focus groups and have them printed. Now, if we had the capability of taking all those transcripts and doing a word cloud, the word that would be right in the middle would be, "It's not fair." The things that people talk about in focus groups are, "It's not fair that my boss likes Johnny better than me. It's not fair that there's a teacher's pet. It's not fair that I don't get paid enough. It's not fair I have to come into the office. It's not fair that I'm asked to work and don't get paid overtime. It's not fair. It's not fair. It's not fair." So fairness has become almost a catchphrase in corporations for any type of mistreatment.

Social psychologists have been studying fairness for years, and one of the original studies was with Capuchin monkeys. And what they did was they put two Capuchin monkeys in a cage side by side, and they were given a simple task to do. The Capuchin monkey on the right was given a rock and asked to give it back. If he gave it back, he got a cucumber. The one on the left, give him a rock, give it back. He got a cucumber.

Then they changed the rules. The one on the right got a rock, gave him a rock, and he gave him a break. I'm sorry, a grape. The one on the left noticed that he got a grape and not a cucumber, and he was, "Oh, wow." So he gets the rock, he gets a cucumber, he gets really upset. He looks at the rock, he looks at the cucumber, he gives the rock back to the guy, he gives him a cucumber. He then takes the rock, tests it on the wall. Gives it back, he gets a cucumber while the other one's still getting grapes. Eventually he starts putting his hands on the cage, rattling it and shaking it because he's so angry.

Now, the big learning there is the big difference between Capuchin monkeys and people is that people have been socialized not to start screaming and yelling and hitting the boss's door. Instead, they express their negative emotion in behavior. And when feelings get expressed in behavior, it's very expensive. People have told me stories like they let products go out the door that they know are defective on purpose. They will mess with the-

Hal Weitzman: You're actually talking about sabotage there.

Lucia Annunzio: Oh yeah, purposeful and deliberate, but justified, justified sabotage. They lie to the customer, let's get them in trouble. I did a focus group once at a plant where I congratulate them because they had just put 12 million in to improve cycle time. Their plant was the winner. And I said, "Congratulations." And somebody in the focus group looks at me and he goes, "What are you congratulating us for?" "For being number one." He said, "How'd you know that?" I said, "I read the report." He said, "Do you know how they get the report? I said, "No." I'm starting to get smart. And he says, "We fill in the numbers." And I said, "Are you telling me you don't put in the right numbers?" And all he did is look at me like I'm staring at you. And he goes, "They lied to us." So he used the perceived negative behavior of his leadership justifying his bad behavior. Most of us good people can't imagine that good people do bad things, but they do. If pushed hard enough, good people do bad things. I call that the Capuchin Monkey Effect.

Hal Weitzman: So the idea being that managers should care about fairness, they should care about fairness, and specifically because it has these negative effects?

Lucia Annunzio: They should care about the perception of fairness. I mean, people feel they didn't get a job because they liked the other person better. Well, is that true or were the qualifications for the job not transparent? Was the application process to the job transparent? After they didn't get the job, did they have a conversation about what qualifications they had, what qualifications they didn't? And most of the time the answer is no. People avoid difficult conversation. People don't like to tell people bad news. What they don't realize is the unintended consequence of not telling the truth is that people think you're lying. You may be lying by omission, but when you lie by omission and your actions and words don't, like I said on the last podcast, people make stuff up and it's always negative. Even if you're a good boss, people make stuff up.

Hal Weitzman: But are you talking about unfairness or are you talking about the perception of unfairness?

Lucia Annunzio: It might be unfair or it may be the perception. I believe in this particular case where I told the story why he thought they lied is because they didn't come and ask them for their feedback. Well, they did go and ask for feedback. They hired a consultant. They got lots of feedback. They did analysis. But what they didn't do was they weren't transparent. They never came back to the plant and said, "This is the feedback we got. This is what we took. This is what we didn't take. This is why we took what we took. This is why. And did we miss anything?" They didn't. They weren't-

Hal Weitzman: But that example would be about, it's about transparency, right? But it's about the perception of fairness. What you're saying is, so let me ask you a question. If they had done all those, if they'd been completely transparent, you're saying in this particular case, the person would not have felt it was unfair? They might still have felt it was unfair.

Lucia Annunzio: They still might, but the odds are less. I don't think you can ever get rid of the Capuchin Monkey Effect. Because of the headlines, because of the 2008 crisis, because of inflation and interest rates and the cost of goods and how many CEOs are making so much money, I think there will always be an inherent distrust. And that has nothing to do with the leader themselves. However, the more you play into that distrust, the more you look like it, whether it's true or not. So there will always be the exception, but you can lessen the number. That's what I believe.

Hal Weitzman: So to be clear, fairness is not equality. It's not treating people the same necessarily.

Lucia Annunzio: No, fairness is not treating people the same. That's unfair.

Hal Weitzman: But you're saying that, well, it could be fair.

Lucia Annunzio: It could be fair. Yes, you're right.

Hal Weitzman: Okay. But in this case, you're saying that people are going to be treated differently. That's just the fact of professional life. But if you tell them why, then they might be more likely to see it as fair.

Lucia Annunzio: Do you have more than one kid?

Hal Weitzman: I do. I have four.

Lucia Annunzio: Okay. Do you treat them all the same?

Hal Weitzman: I don't.

Lucia Annunzio: Why?

Hal Weitzman: Because they have different personalities. I get it.

Lucia Annunzio: They have different strengths, different weaknesses, different skill sets. You're never going to treat everybody the same. There's going to be some people you naturally resonate to and some people you're not. That's on is. When my kids were growing up, I used to say to them, "Life has good stuff and bad stuff. The majority of things are just is's. It's the way it is, deal with it."

Hal Weitzman: Great. It's interesting you raise children, not to compare my own children to capuchin monkeys, but a lot of life feels a bit like that, that you're getting cucumbers when somebody else is getting grapes and there's no real reason why they're getting grapes. Now, they of course, will think that there is, but a lot of it is luck, right?

Lucia Annunzio: Right. And some of this is luck.

Hal Weitzman: Well, it feels like luck.

Lucia Annunzio: Now, in the story that I told, the reason they didn't go back to the people is they were in such a hurry to go live and make more money that they didn't take the time. And one of my big messages is slow down to speed up. You think you're saving time by not having conversations. You think you're saving time by not explaining your thought process. You're wasting time. Because when you don't explain your actions, people will explain them for you. So the fastest way to the goal is to slow down, figure out what people need, how you can make it transparent. And understand, no matter how good you are at it, you're never going to get 100%. But if you could get more than 20, you've done really good. And the more you do it and the more you practice and the more trustworthy you become, that number will increase.

Hal Weitzman: Is it about saving time or do people have a preconceived idea that if I tell capuchin monkey, I'm going to move away.

Lucia Annunzio: Yeah, it's okay.

Hal Weitzman: If I tell Mary that she didn't get the job, I'm going to end up upsetting her even more than just saying nothing. Is there perception that actually she won't think it's fair? She'll think it's unfair, and she will then attach all sorts of things to me that I don't want to be associated with.

Lucia Annunzio: Yes, but Mary didn't get the job and Mary's going to find out she didn't get the job. You can't keep it a secret. Now, what I say is the only leadership skill that is not optional is empathy. Mary didn't get the job. Whether she was qualified for it or not doesn't really matter. She's feeling really bad. And what I say to people is, "Imagine you were married. Imagine you were applying for a job and you really thought you could get it. Imagine you thought you were going to make more money and you could buy extra groceries, or you could get your kid a bike and you promised your kid that bike, and then you find out that Susie got the job instead of you. That really hurts." And if you want to have a conversation with someone, you have to acknowledge to them that, "Yeah, it hurts. It must suck that you didn't get the job. It's hard to go for a promotion and not get it."

Hal Weitzman: Do you think it's really enough to stop the feeling of unfairness, though?

Lucia Annunzio: No. No, it's not. But if you want somebody to listen to you, you have to acknowledge where they are, not where you are. You can't have the conversation to make you feel better. The conversation is about making the other person feel better. What I would advise a CEO or a C-suite executive that I'm coaching, I would say acknowledge that it sucks. Ask them if they want to have a conversation about what they have to do to get it. Are they ready? And if they could say no. They could say, "No, I want to have a pity party for a while." They won't say that out loud, but that might be it. And then offer, "I'm here when you want to because I would like to help you if you want my help."

Hal Weitzman: That sort of brings me to the big question of what fairness really is in a professional setting. How would you define fairness?

Lucia Annunzio: That's a good question. I would think that fairness to be perceived as fair, it's about telling the truth. It's about explaining why things happen. It's about treating people like they have a brain. One consulting assignment I had, it was just so humorous to me. I was in a room with 40 people who had decided to close down a part of the company that was no longer viable in the current digital world, and they wanted me to help them keep it a secret. And I started laughing. I said, "There are 40 people in this room. It isn't a secret." I said, "I'm not going to ask you for a show of hands, but how many of you have told a dear friend or your wife or your husband, and promised them not to tell? And how many of those people have promised them, and it's already out there.

Now, you can get ahead of the rumor mill or you can tell the truth. You can give people stay bonuses. You can treat them with respect and dignity. You can make sure that their package at the end is extremely generous. Or you can take your chances and see what people do when they find out without you telling them."

Well, they did listen to my advice, and it took a year, and it was an environment that when people have a lot of stress, there's a lot of workers' compensation claims. And one of the things that the CFO noticed, or the risk manager, the risk manager noticed, was that this plant had less worker compensation plans, less accidents during that period because they weren't stressed, they weren't anxious, and they actually thanked the CEO. We had a party when it closed, thanking them and giving out awards, and people thanked him. They said, "I don't like losing my job, but I've never been treated before with such respect, such dignity, such honesty." And I met that CEO five years later and we had coffee. And he said to me, "You know that was one of the most touching experiences of my life. I never felt like a better leader, and I was letting people go." So yeah, that's fairness.

Hal Weitzman: That's a heartwarming story. I just wonder, how do you balance the idea of fairness with the difficult decisions that have to be made? Somebody has to be let go, a project has to be turned down, one person has to get a promotion because you've only got one promotion to give or a bonus to give.

Lucia Annunzio: I think I've already answered that question. That fairness is telling why. Fairness is not treating everybody the same. One of my kid's grandparents wanted to always make sure the kids got the same amount, spent the same amount of money on presents. And I used to say to her, the youngest is four months old. If you give her a rattle.

Hal Weitzman: Now's the time to skimp on that gift.

Lucia Annunzio: Yeah, give a skip. And she wouldn't do it. And I didn't think that was fair. I thought the older kids who liked video games is where she should put the money, and when they got older, then put some money in the younger one. But she could not hear that conversation because to her fairness meant equal. To me, fairness means treating people with respect and dignity according to their skills, place in life and telling them the truth.

Hal Weitzman: If you're enjoying this podcast, there's another University of Chicago podcast network show that you should check out. It's called Nine Questions. Join professor Eric Oliver as he poses the nine most essential questions for knowing yourself to some of humanity's wisest, the most interesting people. Nine Questions with Eric Oliver, part of the University of Chicago podcast Network. When you do your focus groups around the world with teams, employees, to what extent do they think of fairness as these behaviors that you're talking about? And to what extent do they just think of it as compensation, vacation time?

Lucia Annunzio: No, they don't make the leap that I've just made. Not at all until...

Hal Weitzman: So you're saying they do think about how much they're paid, how much vacation they get?

Lucia Annunzio: Oh, I've never met the company that didn't think they were underpaid.

Hal Weitzman: Right.

Lucia Annunzio: Okay. I've just never met that company. One time I did a focus group in a company and they were convinced that they couldn't be competitive because their executive salaries, or high level positions were less than their competitor, and that their stock options were less. Well, I went back to the CEO because this guy was a really generous guy. "What's going on here?" And he said, "I don't think that's true." And we went to the comp people, and in fact, they were not only being paid more than the competitor, their stock packages were much more generous and lucrative. So that was an easy fix. We just went around the country dispelling disinformation with real information and charts and graphs and data, and we dispelled it.

Hal Weitzman: And really, and they then thought it was fair?

Lucia Annunzio: Well, they had the numbers, they had the proof, and it was an outside independent comp expert who came in and told them that.

Hal Weitzman: Right. I bet the CEO was pleased.

Lucia Annunzio: Oh yeah. He was so glad We uncovered often in focus groups.

Hal Weitzman: We didn't have to pay them any more money.

Lucia Annunzio: But he was already being overly generous and being accused of being cheap. And I knew this guy, this guy was anything but cheap. That's what was so shocking to me.

Hal Weitzman: So your argument would be that if you tell people, if you show people that they are being treated fairly, then they will believe it.

Lucia Annunzio: No, I said more people will believe it.

Hal Weitzman: Okay. I wonder when our capuchin monkey brain takes over and we just think, "We're always being treated badly."

Lucia Annunzio: Some people are naturally skeptical. Some people default to mistrust. Our natural instinct is human beings is default to trust. That is our natural instinct. Until we see a mismatch between what somebody is saying and doing. Now, some people mismatch and they are telling the truth. I mean, the most classic story is Amanda Knox who didn't look like she cared about her friend. And so the Italians who couldn't believe that your friend-

Hal Weitzman: Just remind us who Amanda Knox was?

Lucia Annunzio: Oh, I'm sorry. Amanda Knox was the person in Italy who was accused of killing her roommate. And she was put on trial, found guilty, then new evidence came up, and she wasn't guilty at all. That whole trial was based on a mismatch because the Italian culture couldn't believe that you wouldn't be crying if your roommate died, and they didn't do a thorough investigation of the evidence. But in life, people will default to trust unless your behavior and actions tell them otherwise.

Hal Weitzman: So give us a quick, the top three things that a manager should do. It sounds like one is just be very transparent about why decisions are being made. What else?

Lucia Annunzio: I think that storytelling is an extremely effective way of stopping the Capuchin Monkey Effect. We've all been to the big reward ceremony where the team with the best results gets the prize. And that really gets the capuchin monkeys going crazy because, "Oh, teacher's pet got it again. I don't have a chance." So I always say to leaders, "Don't just reward results. Reward the result and the behavior that got the result." So if you've had an exceptional result, anybody who's had any star result, no, it doesn't happen in a straight line. It happens in a crooked line. They made mistakes. They overspent their budget. They had to call in other resources, they had to start over again. They had to revise their plans.

If you tell that story and you don't look like the clueless boss who knew what was going on, and you reward the behaviors that actually got the result instead of just the money you made. We do this in companies, and we have these reward ceremonies at first, in the first six months, the top performers are the ones that get the results. But when you tell the story of how people get the results, what behaviors are rewarded, exceptional result looks easier. People start to copy. And after six months, about 30 to 50% of the people were not part of the high performers. And after a year, it becomes 50-50. And that changes the entire culture, just by storytelling.

Hal Weitzman: So the second part was storytelling and kind of?

Lucia Annunzio: Storytelling by rewarding behavior and results.

Hal Weitzman: Rewarding. Okay, another one. You talk about transparency. We talked about storytelling.

Lucia Annunzio: Know what's being said in the hallway. Know what's going on. One of the things we do is we call it leverage the grapevine, who's in your grapevine? Those are the people go to for information. They assume that those people have the right information. They're trusted. Find them. Make them a squad. Make them a team. Give them training. Tell them what's going on. Tell them before you make the big announcement. Make them special. Tell them how to diffuse emotions when people ask questions, so you can get to the real question. Give them access to senior executives with a 24 to 48 hour access. And you'd be surprised how many rumors, how much disinformation we have stopped in companies by doing that.

Hal Weitzman: Okay. And also, if you control of the grapevine, you're in control of the grapes, which means you have happy monkeys, right?

Lucia Annunzio: Great analogy. Yes.

Hal Weitzman: All right, Lucia, it's so great to have you on the podcast.

Lucia Annunzio: Thank you.

Hal Weitzman: Thanks for coming back. That's it for this episode of the Chicago Booth Review podcast, part of the University of Chicago Podcast Network. For more research, analysis and insights, visit our website at chicagobooth.edu/review. When you're there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe, and please do leave us a five-star review. Until next time, I'm Hal Weitzman. Thanks for listening.