KEY CONCEPT

Organizations with high levels of trust have more productive workforces, better employee morale, lower employee turnover, and they also perform better financially than their industry peers. But what exactly are the foundations and characteristics of trust? What steps can executives take to build it and to avoid its erosion?

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IDEA SUMMARY

It is universally acknowledged; we hear our most successful leaders espouse its importance all the time – but ‘trust’ in an organization can be infuriatingly intangible, and a slippery thing to quantify indeed. What we do know is that trust is vital to success – while on the other hand distrust can be disastrous; leading to lower levels of employee morale, commitment and productivity. This Idea is designed to help an HR function increase trust within an organization.

Firstly, it is important to see that there are certain characteristics visible in organizations with high levels of trust:

• Credibility: employees mean what they say, and believe what they say is true. They have the confidence that the actions of others will remain consistent with their words. Management is seen to be ethical in its business practices.
• Respect: employers support their employees’ professional growth and offer consideration of their ideas in decision-making processes.
• Fair treatment: employees believe they are treated fairly, regardless of their position within the organization
• Interaction: something as simple as a conversation between co-workers, or a five-minute chat in the break room between managers and employees, can convey a willingness on the part of one person to do something that is to the benefit of another person’s health and well-being.

Secondly, we can understand that if trust increases profitability and helps in attracting and keeping talent, then it follows that a lack of trust lowers productivity and increases employee turnover. And yet despite this, it is still a rare commodity in most organizations. Previous research has found that 9 out of every 10 employees have reported experiencing some sort of breach of trust in the workplace on a regular basis.

A detailed best-practice example is given in the full White Paper attached – of the Whole Foods Market, which has been consistently ranked as a high trust organization. Their CEO, John Mackey, points to a number of factors that can help other organizations follow in their footsteps.

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BUSINESS APPLICATION

It is clear that HR should have a central role in establishing or re-establishing trust throughout an organization. The following mnemonic can be kept in mind when trying to improve trust in an organization:

• T = Teach: Teach everyone in the organization how things work; make it as transparent as possible.
• R = Reward: Make sure reward systems align with corporate value and goals.
• U = Unconditional Support: Encourage innovation. Create an environment where mistakes are opportunities to learn, not to punish. Give employees permission to “think outside the box.”
• S = Share Information: Communicate clearly and frequently.
• T = Trustworthy: Make commitments and keep them.

This White Paper goes on to suggest four practical steps to be taken by the HR function:

1. Assess the level of trust in their organizations, which can be done through employee surveys and confidential one-on-one interviews.
2. Once assessed, the results of an organizational survey of trust should be openly communicated to all employees. Organizations must communicate as openly and transparently as possible with employees at all levels.
3. Assess your own trustworthiness and whether HR programs and policies promote trust in the organization. Ask other senior leaders to do the same.
4. Follow up and remain vigilant.

These proactive steps can improve trust in the workplace, and hold back the flow of employees leaving an organization.

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REFERENCES

How to Build Trust in an Organization. Chris Hitch. UNC Kenan-Flagler Business School White Paper (2012).

 

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