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Getting to know you

Developing a culture of trust can boost your balance sheet. But to trust you, staff first have to get to know you.

Do you trust your boss? If the answer is yes, then you’re in the minority. A recent research study of 15,000 UK and US workers conducted by Watson Wyatt found that 51% of US workers have trust and confidence in their senior executives, while only 31% of UK workers feel the same.

In the US, at least, Enron and other high-profile corporate scandals were a blessing in disguise in some respects, prompting US businesses to work hard to re-establish trust with their stakeholders. Half of all US workers may not seem like a huge proportion, but the figure has recovered from a post-Enron low of 44%.

The same cannot be said of the UK, where no such similar upward trend is apparent. This statistic has worrying consequences for the state of industrial relations in the UK. But a bigger worry is the potential impact on business and financial performance.

Research consistently demonstrates that trust is essential to organisational performance, especially during times of change, because it is trust that drives employees’ commitment to the business and the achievement of its goals. Lose that trust, and there’s a good chance there will be a corresponding lack of employee engagement, teamwork and individual empowerment, all of which will directly affect your bottom line.

So what is the nature of trust and what benefits can it bring to organisations? Trust between an employee and a leader is dependent upon beliefs regarding the character and qualities of the leader, and about the nature of the relationship. Put simply, to inspire trust, organisational leaders must be seen as being competent, having integrity and feeling genuine concern for the welfare of those under them. Some research even suggests that competence is the least important attribute of the three.

The establishment of trust requires a history of interaction between the parties involved. In employee opinion surveys, it is not uncommon to find that neutral responses to questions regarding senior managers are as high as 40-50%. This indicates that up to half of employees may not have enough information about senior managers on which to base a definitive opinion. Under these circumstances, it is hard to see how trust can flourish.

Trust is a psychological state and as such is entirely dependent upon the perception of the employee and to some extent is independent of objective reality. This means that even employers who are scrupulously honest, open and consistent in all of their dealings with staff may fail to engender trust in their employees.

In fact, when the results of staff surveys emerge, managers often complain that, even though they have done all they can to communicate openly and honestly with staff, perceptions remain unchanged.

‘It’s not our fault if staff are so cynical,’ is a common retort, which suggests that, although senior executives may go through the mechanics of communication, they fail to engage in a discourse with their staff in a way that really establishes trust.

Implicit trust is a willingness to assume a position of vulnerability by placing your fate in another’s hands. This is of particular relevance at times of change, as the willingness to embrace change requires a step into the unknown. In the absence of trust, employees can become resentful and obstructive to changes introduced by management.

Trust is reciprocal – and that means before you can receive it, you have to be prepared to give it. Therefore, the onus is on leaders to demonstrate confidence in their employees before they can expect anything in return.

If trust between staff and senior managers is eroded, for whatever reason, there are ways to repair the damage. Forget simple answers or quick fixes – the first key to building trust is for senior executives to establish as personal a relationship with employees as possible.

This is something that does not come naturally to many organisational leaders and may even be seen as potentially threatening to their authority.

Although face-to-face communication is almost always preferable, in large organisations, personal interaction with all staff on an individual level is both impractical and unrealistic. So as well as letting employees know what is expected of them, leaders need to raise their personal profile within the organisation and to communicate what they stand for as individuals – their hopes for the future as well as the problems they face.

In other words, organisational leaders need to demonstrate their willingness to make themselves vulnerable.

Given its reciprocal nature, this kind of candour will engender trust and provide a positive role model. This is one key area where US business leaders have historically led over their UK counterparts.

Another, more direct way of demonstrating trust in employees is through consultation and increasing the opportunities for participative decision-making. This is one of the objectives of the Information and Consultation Directive, due to come into force in April. Watson Wyatt’s research suggests that this directive may be sorely needed; only 18% of UK employees believe their management successfully involves employees in decision making, while less than a third feel that the reasons for major decisions are sufficiently well explained.

Promoting a common set of values in a corporate values statement can help to build a common credo for organisations. But defining organisational values in this way opens up senior management to increased scrutiny. Unless these values are embodied at all times, they can be at best damaging to trust and at worst counterproductive.

Andrew Cocks is European head of employee research at Watson Wyatt, a consulting firm focused on human capital and financial management

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