Highly publicized corporate misdeeds have shaken investor confidence, but they're also taking their toll in the workplace. A growing number of employees are losing trust in corporate officers. This erosion of trust threatens to bring lower productivity levels and other critical problems.
For executives, the first step to regaining employees’ lost confidence is to understand why employees are mistrustful. The next step is to improve their standing with managers and staff by setting an example of honesty and trust. Finally, corporate leaders must build a culture that respects employees and values their contributions. This may require a fundamental change in the way corporate executives view employees and the nature of work.
The erosion of trust
"Falling levels of employee trust are a major threat to future corporate competitiveness," said Ilene Gochman, Ph.D., who serves as national practice leader for organization measurement at Watson Wyatt, an international human capital consulting firm headquartered in Washington, DC.
According to a Wyatt WorkUSA 2002 survey authored by Gochman, only 39 percent of employees trust senior leaders at U.S. companies. Only 45 percent of workers believe their senior managers are competent—a 5 percent drop in confidence since 2000.
"Unless corporate America can resolve the crisis of confidence among its employees, it has little hope of restoring the trust and confidence of investors that is so crucial in these economic times," said Gochman.
The crisis in worker trust didn't happen overnight. Workers have grown increasingly weary and cynical over the last two decades, according to Darwin Gillett, head of the Institute for Human Economics, an organization that researches and communicates new models of managerial science for leaders of businesses and other work organizations.
The reason for the growing mistrust lies in the "reengineering" movement of the 1980s, a decade in which middle managers and other workers lost their jobs in the name of improved efficiency and profit.
"The reengineering fad of the late '80s and early '90s sent a message that employees didn't count," says Gillett.
In the mid to late1990s, executive compensation became increasingly tied to performance, creating a situation in which corporate leaders’ salaries grew faster than earnings per share. "All that counted was getting a few more upticks," says Gillett.
The last two years have brought enormous job losses in the technology sector, and that has boosted workers’ animosity toward corporate leaders.
Employees’ trust must be earned
To turn the loss of confidence around, experts and TechRepublic members offer simple yet strong advice for tech leaders: be trustworthy, be honest, and act with integrity.
"It's not just a matter of what they do, it's who they are. It starts with character," explains Gillett.
TechRepublic member and CTO/CEO Nils Stuart agrees with Gillett. Executives who have misrepresented the truth about the fiscal health of their companies, buyouts, mergers, or job security are the ones whom workers don't trust.
"The crisis in confidence and trust is aimed at those who frankly aren't trustworthy," says Stuart. "Trustworthy people are trusted. Honesty is always the first and best option—especially with yourself."
In addition, corporate leaders must have a fundamental belief in the value of their employees and treat them accordingly. This tends to fly in the face of older leadership models that focus on "extracting" knowledge or "work" from employees. In such models, executives instruct managers to provide "incentives," such as perks and pay raises, to get that effort from employees. But in these conditions, employees tend to give the minimum effort necessary to get the promised reward. This strategy doesn’t help managers get the best out of their workers.
"If they [managers] see employees as something to be manipulated, they won't get much out of those people, and they won't get trust," explains Gillett.
Build a culture of respect
In short, workers want respect. Executives need to view employees as equally important as profits and create a culture in which employees are valued for passion, creativity, and a desire to be part of a community. In some cases this means executives will have to change their conceptions about the nature of work, workers, and what constitutes corporate success. One thing corporate leaders can do is to examine and internalize the traits of the most effective corporate leaders and organizations.
"If it's always about profit and the bottom line, that says something about what executives will be willing to do to get there—just about anything," says Gillett.
Regaining lost trust isn’t easy, but the rewards are greater worker involvement and effort, higher productivity, and a solid foundation for the future.