Decision-making is a crucial aspect of organizational life, and we know quite a lot about how group and individual decisions are made. Less is known, however, about how these decisions are received, and if potential differences exist when the decision maker is a group rather than an individual. For example, what happens when a worker receives a layoff notification? Would the fairness of such a decision be perceived differently if it were made by a group rather than an individual? Prior studies found that people think groups are less likely to be influenced by biases. What is still unknown is if the group's decision is also more likely, or not, to be perceived as fair.
A paper by Bocconi Department of Management and Technology's Ekaterina Netchaeva, Northwestern University's Maryam Kouchaki, and Cornell University's Isaac Smith interestingly finds that people perceive groups to be less fair than individuals when receiving an unfavorable decision.
The authors decided to explore this topic while discussing the idea of the wisdom of the crowd. "The way we think about the wisdom of the crowd usually means that if you make a decision, you make a group decision because in this way it's going to be a better and wiser decision. But then we started thinking of some instances when this might not be necessarily true" Netchaeva says. "Perhaps when a decision is made by a group rather than an individual, the perception of the final decision could be less positive. So if the group makes the decision and the decision is negative, this adds more of the savor taste."
Evidence of this intuition was found in two experimental studies. But then, to account for this difference in fairness perceptions, in another experiment the authors also show that it's the mere presence of a group as a decision-making body that serves as a cue that increases the accessibility of negative group-related associations in the perceiver's mind. A final test was made with a group of recently laid-off workers. The workers who received a layoff decision made by a group (compared to an individual) were not only more likely to perceive the decision as unfair, but also less likely to endorse the organization.
"The interesting thing about our study is that we think about the wisdom of the crowd as something good, but this is not a rule organizations should be following" Netchaeva explains. Sometimes it might be better to conceal who is behind the decision, if a group or an individual, so that individuals are less negatively inclined towards the decision maker.
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