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Social Contracts and Social Fabrics

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A few weeks ago I was asked to reflect on and present at a conference on what 30 years of studying people at work have taught me about the topics of Social Contracts and Social Fabric. To be honest at first I wasn’t exactly sure where to start, but the conference was being put on by some old friends and it was in Geneva, Switzerland so I decided to participate. For this topic I began thinking about all the employee survey data I have collected and examined over the years (thousands of organizations) and the various types of organizational uses that this data has been put. Importantly, the conference organizers were asking about my opinions and even though my opinions are informed by data, they wanted me to go slightly further and inject some beliefs that have arisen from the research, even if I did not have hard data on the topic. I ended up having much more material then I could possibly present in the time allotted so in the end I had to shorten what I spoke about, but I wanted to present some highlights here.

There are a lot of misconceptions about people at work. Some of those misconceptions center on what people want out of the work environment. Other misconceptions center on differences that people have about work that are driven by generation, gender, geography or ethnicity.  And if you make your living looking for differences between people, differences can be found. However, what people have in common is much more substantial and important and we would be better off focusing on our commonalities than our differences. Most, if not all of the differences that are cited in the popular press is the product of confounding variables (such as environmental situation, economic conditions or life stage) that are rarely taken into account when reporting on people at work. Some samples of the myths that have arisen include:

  • Younger people have different drivers of what they want out of a job than older people;
  • Older workers are more loyal to an organization;
  • Older people don’t want to learn new things – especially technologically oriented things;
  • Everyone is unhappy about their pay;
  • People with a lot of work to do will be less positive about work than someone with little to do;
  • Chinese, Bangladeshi, Vietnamese, Thai, or other 3rd world workers don’t mind the working conditions and hours to which they are subject.

The list can go on and on, but in general these kinds of statements are usually given by people who have no data to back them up, or the data they do have is suspect. Whenever I talk about this topic I am reminded of a scene I came upon in Indonesia numerous times. In Jakarta there are sewage swimmers, workers who, wearing nothing more than a pair of shorts, immerse themselves in the open sewers to remove blockages that could prevent the sewage from flowing. I have never had an opportunity to study these workers to ask them their opinions, but when I have seen them, I am convinced that their concerns and what they want out of a work environment, the fundamentals, would be little different than the concerns or desires that you or I have. So how can they submit themselves to conditions so foul that it will most likely shorten their lives?

If you define organizations broadly, and I do, fundamentally, people join organizations to achieve goals that they can’t do alone. And people are members of many, many kinds of organizations. Everything from where you work, to where you study, to volunteer organizations you belong to, to the city or state you live in, your country, your immediate and extended family, any organized religious group to which you belong, they can all be thought of as organizations. If you add up all the different kinds of organizations to which we all belong, and the rules by which they operate, you have a society. The society in which we live is an amalgamation of all the organizations which are operating in that space. This notion is nothing new and Socrates uses this kind of argument in explaining to Crito why he must accept the death penalty that has been meted out. He explains that society had created conditions that allowed Crito to be born, to live a good live, to achieve. And when Crito violated the rules of that society, as a society member, he must accept its punishment rather than flee.

Over the last 30 years it is pretty clear that on the fundamentals, what people want from the organizations in which they work there has been very little or no change at all. Show me someone, anyone, anywhere in the world who doesn’t want to be treated with respect and dignity at work. Or someone who doesn’t want to feel like they receive fair compensation for effort expended. Or someone who doesn’t feel that the time they spend in the organization will hopefully lead to a more positive future either for themselves or their children. The differences that are often cited between generations or other demographically defined groups of people (e.g. men vs. women, minority vs. non-minority), such as expected time to promotion, safety, or desire for job security, have almost nothing to do with who the workers are as people and everything to do with the economic and social conditions in which they are imbedded. It is also true that every characteristic, such as desire for job security, or expected time to promotion, or risk tolerance will express itself as a distribution due to individual differences, but those individual differences are not driven by the traditional demographic characteristics to which they are often attributed.  In general, within any of the traditional demographic groups you can find a distribution, a spread of the expression of a characteristic (e.g. risk tolerance) that will be greater than the differences between demographic groups.

Due to this, over the long-term, the end state of globalization and the social contracts in which it is imbedded will not be driven by governments or by the multi-national corporations. The end state of globalization will be driven by what people want and what people want is pretty much the same thing everywhere. Now, there are individuals, governments and corporations who take advantage of discrepancies that exist in social contracts to pursue their own agendas, but over time these social contracts will evolve and the ability to take advantage of the discrepancies in social contracts will diminish.

So for instance, a corporation or other organization, in its perfect world, would want to be able to do whatever it wants without concern of oversight, regulations, prosecution or penalties. And the individuals who run these organizations would want any crime committed on behalf of the organization in pursuit of those goals to accrue no personal liability. While there is a desire for praise and recognition for what the individual achieves, their contribution to the organization, there is also a desire for anonymity within the organization, being able to hide behind the organization’s “walls”. What organizations also want though is not to have other organizations, perhaps more powerful than they are, to take advantage of them. So organizations, to achieve a balance between treatment given and treatment received, are willing to abide by the social contracts/the social fabric as currently defined by society.

As humans, of course, we are all subject to the flaws inherent in being human. There is always a person or group in power or an organization that is willing to live by an existing social contract which is in its favor until, as society changes, that social contract must change. There can be resistance by those who have benefited from the existing social contract to make changes to that contract for it may have benefited them financially, socially, or simply reinforced their beliefs. On a larger scale, different forms of government, (e.g. democracies, dictatorships or authoritarian rule), also have different social contracts in place (e.g. who gets to vote if they vote at all, access to basic health, shelter or food, who gets to marry) and while there are differences in these social contracts, what people globally want, what they find important is fundamentally the same.

This combination, I believe is at least partially responsible for the inexorably slow but consistent march by humanity to more tolerance and freedoms as well as societies with less violence for people over time. We may take three steps forward and two steps back, but over the long term we are moving in a consistently more liberal and tolerant direction. Why is the march of history in that direction? Because people are fundamentally the same and want the same things out of life that everyone else does.

Multi-national corporations have chased various social contracts that exist by location to maximize their profits. Looking for low standard of living, low cost environments, and regulatory-free environments to manufacture or provide services from. But there is an inherent conflict in that the social contracts/the social fabric in the locations that allow for profit maximization over time will change. It may take a long-time, likely too long, but basic salaries will rise, working conditions will be forced to improve, regulatory oversight to insure quality standards and lack of worker abuse will be put into place etc. And the ability to chase a social contract that is way out of whack with other social contracts will diminish.

Humans want to place their faith into something and due to that we have a tendency to ascribe even random events to intelligent entities, or we see patterns to events where none may exist. Built into all of us there is a desire to allow some entity, which is more knowing or more powerful than us to provide guidance or direction. Some put their faith into their religion, some into science, some into their political leaders, and some into their leaders at work. Me? I’ll put my long-term faith into humanity as a whole as our humanity allows us to reach beyond where we are, even if sometimes in the short-term we will fall short. As people together, we will determine our own future.

© 2013 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

December 1, 2013 at 12:31 pm

Honest Expectations and Dishonesty

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“…I heard the Chaplain say, Women and Children and Chaplains First”

Harry Chapin from Dance Band on the Titanic

People pause just a bit upon hearing the words to Harry Chapin’s song, Dance Band on the Titanic due to the violation of social norms implied by the chaplains’ words. In a civilized society the strong are supposed to look after the weak, parents (or parental figures) look after their children (or child-like figures), in the world of work organizational managers are not only assumed to be looking after the organization’s health but the well-being of organizational members. Those who genuinely aspire to look after our spiritual well-being (if not charlatans) are also tasked by their followers with looking out for how we behave ethically as individuals and collectively as a society – especially if it is a “calling” to which they are drawn rather than something they do simply for profit. Violation of those precepts, or violation of the moral obligations by those to which others look towards as standard bearers, placing in them their confidence and trust, leads one to look closer at what is occurring, and whether the trust that was given was misplaced.

Consider a male physician who is paid in a transactional way to look after the physical well-being of a male lawyer (treating him for say a nasty fungus). The expectation that a male physician would give up a seat on the Titanic’s lifeboat for the male lawyer who happens to be his patient is just not there and there would be no moral obligation for him to do so. The physician violates his moral obligation to the lawyer only if he violates his occupation’s ethical rules, or the societal rules surrounding the physician/patient relationship, such as treating the lawyer’s fungus with a cure that he knows to be worthless or charging for treatments that did not occur. 

Contrast that to higher order social “contracts” which are performed not for the sake of earning a living or barter of some sort. These social contracts will often create a much stronger bond between the parties involved in the contract/relationship. For instance, a parent/child relationship (or between parents and society regarding how they should behave with their children) creates much stronger expectations regarding certain protective behaviors then one done for compensation, such as between the physician and the patient, even when the child is adopted and does not carry the parents genes. When a violation of the societal norms occur in the parent/child relationship/contract, as in the case of child abuse, society may step in to protect the child, the weaker party in the transaction. People devote themselves to their community, causes, political party, religion, heritage, etc. generally without the expectation of financial gain, but never-the-less creating very strong attachments and social contracts to the various groups and with those strong attachments come expectations. When those expectations are clearly shown to be violated, people’s attachments (first after potential denial) can be severely weakened.  

Another implication of Chapin’s Titanic song is that somehow the chaplain, possibly of weak character, also considers himself more worthy of saving than others and this just does not sit well, a violation of fairness and situational efficacy – the potential of the situation to lead to success for an individual. In the workplace, the managers who consider themselves more worthy of or more deserving of special favors, the accumulation of wealth or organizationally bestowed benefits given to them at the perceived expense of other employees, fall into the same category. When one of them gets caught up in scandal, ethical violations, or illegal activity, once again attention is focused, and people can feel like fairness and situational efficacy are being restored.

What are some of the differential drivers of when various social norms, honesty or ethical behavior apply? One aspect seems to be time pressure. Benno Torgler examined the behaviors of those sinking on the Titanic, which took 2 hours and 40 minutes to submerge into the ocean’s depths and compared it to those on the Lusitania, which sank in 18 minutes. Published in the Proceedings of the National Academy of Science and reported in Science News, Torgler found that on the Titanic healthy young men were more likely to go down with the ship while women and children (doesn’t say anything about chaplains) where significantly more likely to have made it into a lifeboat. In fact, women were 50% more likely to survive then men. Young men between the ages of 16 and 35 were 7 percent less likely to survive than a referent population (those over 35, childless and traveling in 3rd class). On the Lusitania, with much less time for social norms to kick in, “an every person for themselves” mentally seemed prevalent, with young men being 8 percent more likely to survive, while women in total faced the same odds as men. Children on the Titanic were 31 percent more likely than the referent population to make it into a life boat, while on the Lusitania they fared slightly worse than the referent population. (This is the same methodology that I use to conduct diversity studies in organizations and it works well.)

Society’s and individual’s expectations of what is proper normal behavior, ethical or honest behavior is not independent of the circumstance in which people find themselves, but rather is heavily influenced by the unique circumstances in which people or a workforce is enmeshed. And what is normal or acceptable may also look different in hindsight when compared to the pressures of the moment.

Why would an organizational manager for instance “cook the books”, thinking that they could get away with falsifying something that becomes memorialized and is available for detailed inspection over a lengthy period of time?  As in the Lusitania sinking, one possible answer to behavior that upon a lengthier period for reflection might be viewed as unacceptable are the time pressures that managers feel in order to “make their numbers”, the pressure of the here and now. But other factors show up as well. One study on dishonest behavior on the part of managers in organizations comes to the conclusion that the opportunity to cheat and behave dishonestly is able to explain dishonesty and cheating more than any of the other factors or characteristics of the manager, in other words simple access to the opportunity to be dishonest. Checks and balances anyone? Regulatory oversight?

Elizabeth Scott and Karen Jehn of the University of Pennsylvania and The Wharton School respectively, define dishonesty as occurring when “a responsible actor voluntarily and intentionally violates some convention of the transfer of information or of property, and, in so doing, potentially harms a valued being.” They then refine this definition to differentiate among various categories of dishonesty, such as theft and deceit. James Eck from Washburn University demonstrated that those with dishonest characteristics can not only cause organizational failure but by measuring the lack of honesty in management you can predict organizational failure 3-years out. He determined that most failures of property-liability insurers resulted from dishonesty and the removal of assets from the company and into the possession of management. And that an approach that measured honesty, rather than relying on loss reserves and loss ratios on the balance sheet, as is done today, was successful in correctly classifying 88% of the firms three years prior to their liquidation. Measuring organizational members, their attitudes, characteristics and behavior as a way to determine organizational success, has been demonstrated time and again as a powerful predictive tool, rather than simply relying on the numbers kept on the balance sheet.

The likelihood of managers (or others) being dishonest can increase after they observe dishonest behavior on the part of others. This is especially so if those engaged in dishonest behavior view the benefits received as greater than the costs associated with dishonest behavior. For instance, if a manager observes another manager cooking the books, and that manager is rewarded for doing so, then observing another manager benefit from dishonest behavior will increase the propensity of otherwise honest managers to also act dishonestly (Becker).  Managers it was also found increase dishonest behavior when dishonest behavior is condoned by the peer group to which the manager belongs. (Cialdini &Trost).

When the group being observed as being dishonest is not considered a peer group (a group that the manager considers him or herself similar to) by the observer, a contrasting effect may emerge. Observation of a dishonest act in this case may increase the awareness of the dishonest behavior as something to be avoided, for who want to be like those that are observed as dishonest (Gino, Ayal & Ariely).  Additionally, increasing the perceived costs of acting dishonestly with a swift and a forceful reaction may increase the perceived costs of the dishonest behavior and reduce the occurrence of dishonesty.  

Honesty and dishonesty, what is perceived as acceptable vs. violation is not only influenced by societal norms and values, but also by basic underlying characteristics that as human beings we all contain. Those characteristics are not binary with for instance, someone being either honest or dishonest, truthful or a liar, etc. but rather exist along a continuum. Someone who is normally quite honest when placed in an inappropriate enough situation may lose their honesty, at least temporarily. And it has been shown that cheaters in academic or business situations, may be willing to cheat just a little bit, but of course even cheaters have their standards and will not violate them by cheating to an extent that violates those standards. As humans, gathering and processing the daily doses of information that impinge, we tend to categorize and paint with a broad brush, everything can be seen as either black and white, but often that is just not the case. The path to increasing honesty and fulfilling our expectations around honesty can be impacted by:

  • increasing the amount of measurement on the “honesty” component within organizations
  • removing the opportunity for dishonest behavior – installing checks and balances or oversight within organizations
  • not looking upon dishonest individuals as peers, but rather have peer groups in place that exhibit honesty – changing the norm
  • not allowing a “pass” on the part of those behaving dishonestly, in effect rewarding dishonesty; but rather rewarding honesty
  • allowing time for adequate reflection on the consequence of behaviors; avoiding snap or time pressured decisions.

© 2010 by Jeffrey M. Saltzman. All rights reserved.


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