How favoritism undermines businesses

If you run your own business then it is in your interests to get the best person for the job and to promote people based on the value they add to your business. However, if you choose to do otherwise, such as hiring and promoting your friends or relatives or people you like, then ultimately that is your choice: it's your money and if you lose out as a result of your decision then that is your prerogative.

However, if you are a manager in a government organisation or a publicly traded company, then basing decisions on factors other than what the person adds to the business effectively means that you are stealing from the "owners" (i.e. taxpayers or shareholders). In effect, you would be deliberately creating a sub-optimal outcome for reasons that have nothing to do with the success of the business, aiming instead to benefit your "favourites".

And this effect doesn't just stop at sub-par work being performed by your favorites. Let's look at some of these consequences.

Firstly, you undermine confidence in the competence of those so favoured. Generally, the feeling among employees who see what is happening is that if the favourites were all that good then they would be able to compete on their own merits. So the fact that they had to be given the opportunity rather than earn it suggests that they are less competent than others who might have competed for the opportunity. It also suggests that the person playing favourites is aware of this and has deliberately short-circuited any competitive process for that very reason. In some ways being the favorite is a double-edged sword: on the one hand you are being given the benefit of an opportunity, but on the other hand, even if you would have won the opportunity on merit in a competitive process, your reputation as competent in your own right is being undermined. And that can have consequences later on if your "protector" leaves the business or is moved elsewhere within the business.

Secondly, the person loses the confidence of the workers. If they are prepared to act with so little integrity in this matter then what else may they be doing? Can they be trusted? Who may they be undermining behind the scenes without that persons knowledge? Where there is a lack of transparency, workers may fill in the blanks themselves and draw their own conclusions, tinged with a justifiable paranoia.

Thirdly, such favoritism demotivates other workers: if promotion is based on being the boss's favourite then what is the point in doing a good job? Or, they may continue to do a good job just so that they get a good recommendation when they apply for jobs in other, fairer organisations.

Fourthly, it undermines co-operation within the workplace. You can end up with an environment were people do the least they can do without getting fired and where change is a struggle because disaffected workers withdraw their participation in change measures. Where rewards are not based on merit, passive resistance becomes the strategy of choice.

Finally, you fail to recognise and fully deploy the skills and knowledge of other employees who may have a greater claim to the opportunities on offer.

In summary, if you are a manager working in a business you don't own, then by playing favourites you are not only failing to act with fairness or integrity but aren't even earning your own salary since you are sowing the seeds of problems and dissension within the business instead of moving it optimally in the direction of its objectives.

I've painted a pretty grim picture. But unfortunately it is a reality in many organisations today when managers get it into their heads that they are in charge of their own little fiefdoms and lose sight of why they were hired in the first place.

Why employee recognition schemes fail - Part 1: the management motivation

In Simpsons episode Deep Space Homer Homer is the only employee who has never won the "Worker of the Week" Award; he is sure he will win but Mr.Burns gives the award to an 'inanimate carbon rod'.

What lesson does this hold for us?

Frequency and easy availability devalues awards

Well to begin with what value does an award have if everyone wins it at some time or another. Almost by definition recognition is about recognising performance which is superior or exceptional in some way. The frequency of recognition undermines any value in recognising at all. People tend to value what is rare and what is earned. They don't tend to value things that they know they will get sooner or later without exerting any effort.

A friend of mine told me about a practice in his organisation where the minutes of meetings of the top management always contain a section in which there are about 20 examples like the following:

X thanked Y for their excellent work in doing Z

i.e. where dozens of people are thanked for relatively trivial contributions. Where everyone is recognised, effectively no-one is genuinely recognised. And when staff read these minutes they roll their eyes and think to themselves how self-congratulary they are.

Everybody has won and all must have prizes
~ the Dodo in Alice's Adventures in Wonderland

Cynical manipulation

And this raises the question of why management wants to recognise employees. What is its intent? What is it intended to achieve?

It isn't intended to make staff feel good. It might make the 'winners' feel good, but more likely than not the 'losers' feel bad or are indifferent to the whole process.

It may be intended to encourage other staff to aspire to similar levels of performance. However people also tend to devalue what they know they will never get regardless of how much effort they put forth.

The winners of awards may have had more resources to help them than other staff (resource bias). Or they might have been tapped on the shoulder to do a project that other people not chosen might have done as well as or better than that person (opportunity bias). Or they may be working in a job with a higher profile than other workers (profile bias). Or they may just be management lackeys (favoritism). None of these things provide anything that may be achievably aspired to.

And on occasion the motivation has nothing to do with the staff at all.

Another friend of mine told be a story about a manager who saw that in the strategic plan that the division of which their unit was a part was required to put in place a staff recognition scheme. So purely to be able to tick off that it had been done and more importantly that they had done it and other managers in their division hadn't, they went ahead to set up such a scheme. It had nothing to do with staff and everything to do with playing politics.

When staff become aware of such things, you can't really blame them for being cynical.

The takeaway from this is that an employee recognition scheme needs to have the right motivation.

And what is the right motivation?

It beats me. I have yet to see anyone justify any value in such a scheme, even 'successful' ones (successful in the sense that they had no adverse effects) don't seem to have any clear motivation.

If you think of something, let me know!