Richard Branson, the maverick founder of Virgin, once said: “Train people well enough so they can leave; treat them well enough so they don’t want to.”

It seems like common sense. Treat employees nicely – give them interesting, high-potential assignments, provide mentoring and valuable performance feedback – and this will in turn beget correspondingly high levels of interpersonal respect, trust and professional obligation.

But is treating employees well enough, enough? It is not unreasonable to assume that employees, being human, fundamentally look out for their own self-interest. The boss should treat them well but who cares how he treats others? After all, the rule of the jungle has always been survival of the fittest.

Every relationship that the boss forges with those around him/her sends signals about his/her morality and likely future behaviour.

I argue differently. Treating an employee well enough may not be sufficient. Bosses have to treat all employees well for the said employee to stay.

Beyond perceptions of their boss that are formed based on self-interest, such as how well the boss treats them, I argue that even if employees are well treated, their relationship with the boss will still be affected if he or she treats other co-workers less well.

That is, their perception of their boss is not just affected by pure self-interest of how well they were treated, but also by the larger social environment involving how well other employees were treated.

Warning sign

I conducted two studies in the United States and China involving 275 individuals to assess whether employees’ perceptions of their bosses are determined not only by how they are treated, but also by how other members of their groups are treated.

The findings deliver a sober warning to leaders – subordinates watch closely how bosses interact with all the staff, and even non-staff. If they deal unfairly with even just one member of staff, it will affect their professional and personal standing among all the other staff, who will adjust their behaviour towards the boss accordingly.

Whilst bosses should of course continue to treat employees fairly and well, they should also bear in mind that the relationship is not necessarily reciprocal. They cannot expect that just because they treat an employee well, there will be a corresponding high level of trust and obligation from the employee.

The larger social context of leader-subordinate relationships is also important. The subordinate watches how the boss relates to the other co-workers, too. Every relationship that the boss forges with those around him/her sends signals about his/her morality and likely future behaviour. If there is a huge difference between how the boss treats different staff, it creates uncertainty about the leader’s authenticity and consistency. This in turn creates the fear in the employee that he himself may also be treated similarly in future, even if currently he were well treated.

Bosses should therefore not be selective about which staff they treat well or badly. They should treat all staff, and even non-staff – even employees who are low performers, of a low status or otherwise outside the scope of a leader’s daily focus – with respect.

Even if the relationship between bosses and employees are good, this trust and affinity would be affected if bosses treat other staff very differently. Whereas, if bosses behaved consistently in how they treated other staff, the quality of their relationship with that employee is unlikely to be affected. These in turn have important implications for workplace dynamics and employee performance.

Concern for fairness

Individuals within an organisation do not only care about how they are treated (eg. economic self-interest and social standing within a group), but also care about how others are treated. In other words, people have a concern for fairness that transcends the self.

In general, when employees witness a third party being treated unjustly, they are likely to experience significant negative emotions and attitudes towards the perpetrating boss. It offends their own sense of fundamental moral principle of justice and ethical principles, even if they are not involved. They will be dissatisfied with the boss as a result and will even retaliate against those who are rude or abusive to others. For example, when laid-off workers are treated unjustly, the surviving employees become less committed and exhibit lower performance levels.

Some countries pursue civility at a national level, too. Singapore launched a courtesy campaign in 1979 to encourage its citizens to be polite to each other, a nod to the tensions that can arise when people live and work so closely together. In keeping with the times, the campaign has been extended to encouraging telephone and internet courtesy. Such measures are de facto recognition that communal misbehaviour reflects badly on the country as a whole, and is especially crucial for one that depends on its international reputation for a living.

Whether country or corporation, leaders will do well to bear in mind the potential ripple effect of any misbehaviour – the next sharp rebuke or careless, callous word thrown at a peer manager, the janitor or car park attendant, or even the waitress serving you lunch at an off-site deli, could cost you the esteem of your own staff, and even all of your staff and peers; and in turn affect your bottom line at work.