Fairness as a Perception

[From Kenny Kitzke (2003.09.30)]

<Bruce Nevin (2003.09.23.2133 EDT)>

I have changed the subject to get back a little closer to a question you had raised.

<Don’t we do the same as the monkeys here? We see that we get the same as the other guy. Life is good. Then we see that we get something less than the other guy. Hey! I’m just as good as him! What am I? Chopped banana peel? How come he got a raise and I didn’t?>

I am convinced, like Rick, that there is a perception of “fairness” that humans control and that it seems to fit quite well in the “Principle Level” of HPCT. I am under the impression that monkey’s may not have such a level of perception. The experiment did not change my mind. Some experiment might.

It seems clear that each human’s Principle variable and reference of what is “fair” can be different from that of other humans. Our perception is built up from the outputs of our own lower levels as we experience them and they are compared to a reference point set by our own unique higher System level.

So, this “fairness” control, even in humans, does get pretty squishy. Remember at the Conference, Dick Robertson querried into how we can do experiments or tests of principle level perceptual control. As I recall, Bill Powers not only expressed a view that this is a currently quite difficult methodology, he questioned why anyone would want to do such experiments anyhow? [I hope, Bill, I am not misconveying your remarks. Please correct me if I misspeak and recalling wrongly. If accurate, you might want to comment further on the second part, which, like Dick, I was not too sure I understood at Loyola.]

But, Bruce, I especially noticed your reference to “a raise.” Working as a consultant to management, I have seen this repeatedly come up in employee surveys. If you can believe the answers employees give to surveys, I have repeatedly measured a greater negative response to the “fairness” of the wage raise (compensation) system used in an organization than on whether the raise the individual themselves received was fair. IOW, it was often (but not always) the case that anger was created not because I did not receive enough, but that others who did not diserve more, received more!

I remember one corporate CEO who, when presenting the results of a survey I performed which suggested exactly this (that employees were upset with the unfairness of the pay and raise system, not their raise), dismissed the 100% population data out of hand.

He said something like most people will always want more and complain. Let’s move on. He knew the corporation had given less of a raise than people wanted. It was an executive decision he was paid to make. The local executive I worked for just nodded, not in agreement, but knowing we probably could not change this CEO’s perception/mind about people and their pay and perhaps it was the system of pay discrimination among employees that was the larger issue than the raise increase itself.

I have found Bill Power’s theories of “incentives” or pay rewards extremely powerful in understanding what you can and can’t do to force people to change what they do (like work harder or smarter) very enlightening. I must also admit, that only a precious few CEO’s have been willing to try to learn about “Carrots and Sticks” from a HPCT view. Those that have, have benefited greatly.

In this sense, I see humans and employees clearly controlling for “fairness” and appreciating their executives who seem to understand compensation and fairness more from an HPCT understanding.

Like most of our psychology friends, the resistance to the HPCT view is resisted by stimulus-response, cause-effect compensation “experts” who collect big bucks from organizations for designing performance appraisal and incentive systems which supposedly fairly reward those who appear to produce the most.

Any comments or observations are most welcome, but please leave out your personal political persuasions. :sunglasses:

[From Fred Nickols (2003.09.30.1706 EDT)] --

Kenny Kitzke (2003.09.30)]

< snip>
In this sense, I see humans and employees clearly controlling for
"fairness" and appreciating their executives who seem to understand
compensation and fairness more from an HPCT understanding.

Like most of our psychology friends, the resistance to the HPCT view is
resisted by stimulus-response, cause-effect compensation "experts" who
collect big bucks from organizations for designing performance appraisal
and incentive systems which supposedly fairly reward those who appear to
produce the most.

Two of my close friends are former Hay (i.e., compensation) consultants. I
am told by them that it is impossible to design a compensation system that
is seen by all as fair. As they jokingly put it (although I am not
convinced they were indeed joking), the best you can do is come up with a
compensation system that leaves everyone dissatisfied to some extent.

I've also spent a fair number of years monkeying with appraisal and
incentive systems. After all those years, my basic conclusion is that such
systems cost far more than they are worth and they should be scrapped
(hence a paper I published about scrapping performance appraisal systems in
particular). I also concluded that many managers (at least those who take
the time to reflect on such matters) know full well that incentive and
appraisal schemes are quite limited and often counter-productive. Why then
do such systems persist? Well, when it comes to performance appraisal
systems, I think the reason they persist is that they are positively anemic
on the "carrot" side of things but they pack a powerful wallop on the
"stick" side. A long history of glowing performance appraisals won't set
you apart but one damning appraisal can torpedo an otherwise sterling career.

In PCT terms, I'd hazard a guess that people don't control for receiving a
good appraisal; instead, they control for not receiving a bad
appraisal. Those who write them and those who receive them both play this
game. It comes with the territory.

Regards,

Fred Nickols
nickols@safe-t.net
"Assistance at A Distance"
www.nickols.us

[From Kenny Kitzke (2003.09.30.2220 EDT)]

<Fred Nickols (2003.09.30.1706 EDT)>

<Two of my close friends are former Hay (i.e., compensation) consultants. I
am told by them that it is impossible to design a compensation system that
is seen by all as fair.>

Is that why they are “former?”

<As they jokingly put it (although I am not
convinced they were indeed joking), the best you can do is come up with a
compensation system that leaves everyone dissatisfied to some extent.>

This is precisely the kind of garbage the Hay group and other gurus sell. It is a great excuse why none of their proposed systems produce good results. I guess if there was one that every employeee was satisfied with, they would be wrong? Of course, it would not be one they would be aware of since their best always falls short. It may have something to do with their understanding of human behavior and motivation. Tis a shame.

<I’ve also spent a fair number of years monkeying with appraisal and
incentive systems. After all those years, my basic conclusion is that such
systems cost far more than they are worth and they should be scrapped
(hence a paper I published about scrapping performance appraisal systems in
particular).>

I, and many others believe that. It is the alternatives that people want to hear. Do you have one?

<In PCT terms, I’d hazard a guess that people don’t control for receiving a
good appraisal; instead, they control for not receiving a bad
appraisal. Those who write them and those who receive them both play this
game. It comes with the territory.>

I agree with the game-playing. What a waste of time without any increase in improved results!

But, in PCT terms, I like the idea of employee and boss simply agreeing on a wage/salary for next year in the last week of December, or stop working. What do you think of that novel system?

[From Fred Nickols (2003.10.01.0740 EDT)] --

Kenny Kitzke (2003.09.30.2220 EDT)]

<snip>

<I've also spent a fair number of years monkeying with appraisal and
incentive systems. After all those years, my basic conclusion is that such
systems cost far more than they are worth and they should be scrapped
(hence a paper I published about scrapping performance appraisal systems in
particular).>

I, and many others believe that. It is the alternatives that people want
to hear. Do you have one?

As a matter of fact, I spelled out several options in a subsequent
paper. It's titled "Now What?" and addresses the issues raised when people
contemplate scrapping the performance appraisal system. You can find it on
my articles web site or, simply click on the link below:

         http://home.att.net/~nickols/now_what.htm

<In PCT terms, I'd hazard a guess that people don't control for receiving a
good appraisal; instead, they control for not receiving a bad
appraisal. Those who write them and those who receive them both play this
game. It comes with the territory.>

I agree with the game-playing. What a waste of time without any increase
in improved results!

But, in PCT terms, I like the idea of employee and boss simply agreeing on
a wage/salary for next year in the last week of December, or stop
working. What do you think of that novel system?

I think it introduces far too much uncertainty into the relationship; the
last week of December strikes me as poor timing for finalizing such an
agreement; and I doubt bosses or employees would go for it. In short, I
think this "novel system" would constitute a huge disturbance to a large
number of related, controlled variables. But, what the heck, I could be
wrong. Have you ever seen or put such a system in place?

Regards,

Fred Nickols
"Assistance at a Distance"
Distance Consulting
nickols@safe-t.net
www.nickols.us

[From Bill Powers (2003.10.01.0748 MDT)]

Fred Nickols (2003.09.30.1706 EDT) --

Two of my close friends are former Hay (i.e., compensation) consultants. I
am told by them that it is impossible to design a compensation system that
is seen by all as fair. As they jokingly put it (although I am not
convinced they were indeed joking), the best you can do is come up with a
compensation system that leaves everyone dissatisfied to some extent.

I knew someone in the Hay organization, too. The method seems to consist of
comparing what individuals are paid with what other people in other
companies are paid for the same work. I should think that would tend to
spread any existing dissatisfactions even more widely.

Best,

Bill P.

···

I've also spent a fair number of years monkeying with appraisal and
incentive systems. After all those years, my basic conclusion is that such
systems cost far more than they are worth and they should be scrapped
(hence a paper I published about scrapping performance appraisal systems in
particular). I also concluded that many managers (at least those who take
the time to reflect on such matters) know full well that incentive and
appraisal schemes are quite limited and often counter-productive. Why then
do such systems persist? Well, when it comes to performance appraisal
systems, I think the reason they persist is that they are positively anemic
on the "carrot" side of things but they pack a powerful wallop on the
"stick" side. A long history of glowing performance appraisals won't set
you apart but one damning appraisal can torpedo an otherwise sterling career.

In PCT terms, I'd hazard a guess that people don't control for receiving a
good appraisal; instead, they control for not receiving a bad
appraisal. Those who write them and those who receive them both play this
game. It comes with the territory.

Regards,

Fred Nickols
nickols@safe-t.net
"Assistance at A Distance"
www.nickols.us

[From Bill Powers (2003.10.01.0803 MDT)]

Kenny Kitzke (2003.09.30) --

I am convinced, like Rick, that there is a perception of "fairness" that
humans control and that it seems to fit quite well in the "Principle
Level" of HPCT. I am under the impression that monkey's may not have such
a level of perception. The experiment did not change my mind. Some
experiment might.

HPCT, of course, does not say that any particular principle will be
controlled at the principle level. It just says that we can perceive and
control principles. I doubt that all people perceive in terms of fairness
-- seems to me there are languages that don't even contain the term.

Fairness is very much a social principle, since it compares the treatment
of different people. So it means nothing unless more than one person agrees
on what it means and adopts it as a reference level. The word doesn't
"have" a meaning which we have to discover. It doesn't have any meaning
until people agree on just what is to constitute fairness. In my
experience, people who are very concerned about fairness are usually also
trying to get an interpretation as favorable to themselves as possible.
Fairness is for the person waiting in line who has a card with the number
76 on it to be the next served. Well, what do you know, that's the number
on MY card!

It seems clear that each human's Principle variable and reference of what
is "fair" can be different from that of other humans. Our perception is
built up from the outputs of our own lower levels as we experience them
and they are compared to a reference point set by our own unique higher
System level.

We do have the opportunity to discuss social principles with others, so the
principles we finally adopt aren't necessarily unique to each human.
However, it's easy to agree on _names_ of principles, like fairness,
without taking the trouble to say what rules will be involved and what the
overriding system concept is to be. If you put aside the term "fairness"
and look just as what it means, what do you find there? Sometimes, not very
much.

Even the 10 Commandments present this problem: Thou Shalt Not Kill, but
exactly what is meant by "killing?"? Military men who are religious like to
say, "Oh, that means that you should not _murder_. Killing enemies under
the orders of superiors and in defense of your country is not murder." So
they end up doing as they please, commandment or no commandment. As you
say, principles are squishy when we want them to be so.

Best,

Bill P.

[From Kenny Kitzke (2003.10.02.0900 EDT)]

<Fred Nickols (2003.10.01.0740 EDT)>

Kenny said:

But, in PCT terms, I like the idea of employee and boss simply agreeing on
a wage/salary for next year in the last week of December, or stop
working. What do you think of that novel system?

<I think it introduces far too much uncertainty into the relationship; the
last week of December strikes me as poor timing for finalizing such an
agreement; and I doubt bosses or employees would go for it. In short, I
think this “novel system” would constitute a huge disturbance to a large
number of related, controlled variables. But, what the heck, I could be
wrong. Have you ever seen or put such a system in place?>

I used it for a decade with both my own associates and my customers. Never was difficult or a problem Everyone seemed quite satisfied. I always paid my associates on time and got paid by my customers on time, exactly the amount I had agreed upon at the start of the year. Worked like a charm. And, both what I charged and what I paid went up along with inflation and competence. Sorry it makes little sense to you.

<As a matter of fact, I spelled out several options in a subsequent
paper. It’s titled “Now What?” and addresses the issues raised when people
contemplate scrapping the performance appraisal system. You can find it on
my articles web site or, simply click on the link below:

     http://home.att.net/~nickols/now_what.htm>

Thanks for the reference. I saved it. I would love to read them, but my reading list is already “out of control.” Which of the options have you or anyone else followed? What has been the results? That might entice me to gander and see how your options differ from my theory and application and results. I might be able to improve my system, and its inherent “fairness,” even more.

Best regards,

Kenny