Abstract
While prevailing wisdom suggests that managers consider new rules meant to restrict employee behavior to be unfair from an employee perspective, we propose and find the opposite, that managers systematically underestimate how fair employees perceive proscriptive, or restrictive, workplace rules. Across five studies, we develop and test a theoretical model explaining this effect through manager’s self-serving biases and the differences that emanate from an actor versus observer perspective. Results demonstrate that managers underestimate how fair employees perceive managerial decisions to implement proscriptive rules to be. We test two interventions for improving managers' prediction accuracy: soliciting employee perspectives and helping managers to recognize self-serving biases. We find that unless managers are explicitly guided to connect their understanding that they seldom engage in a particular counterproductive behavior at work to employees' perception of a rule curbing the behavior, manager's estimates of employees' fairness perceptions are highly biased. This research contributes to the literature on organizational justice and rule setting in organizations by challenging core assumptions about managerial bias, integrating manager and employee perspectives, and offering practical solutions for improving workplace rule implementation.