Building trust with your employees is paramount, especially in the current unpredictable environment. Jane-Catherine Hartshorn provides some practical tips on how to create and maintain trust so your firm can withstand any economic tremor

The importance of trust can be vastly underestimated in organisations, especially during times of uncertainty and change. It’s one mistake a US multinational with a UK subsidiary, going through a tough time, was not prepared to make. Due to a downturn in demand for their software, the firm faced a real need to downsize and many UK jobs were at stake. This company, however, kept the issue of trust at the forefront of their minds.  Staff were not only informed about the potential layoffs, but they were encouraged to nominate representatives to negotiate with management on their behalf to find a way to mitigate the impact of the redundancies. The discussions held between staff reps and management were open and frank, where management actively listened to and evaluated the proposals put forward to them. Management even accepted some of the proposals, such as the offer of voluntary redundancies.

The result of management taking this process seriously, rather than just going through the motions, was that a number of compulsory redundancies were avoided and the remaining staff felt that the situation had been handled in a fair and consistent manner throughout. Most importantly, management were able to retain the trust of employees throughout the downsizing exercise and morale was quickly restored as a result.

Unfortunately, such an outcome is rare. Some 70% of mergers and acquisitions fail. That’s usually down to management treating the acquisition/merger like a series of financial reports, instead of an organisation that comprises human beings. So, what employees remember from the difficult times, be it downsizing or a reorganisation, are not the difficult times themselves, but how the situation was managed from the people perspective and how leaders treated them. What can help move organisations forward from such a situation is an atmosphere of mutual trust that has developed as a result of the way employees have been treated.

Building the foundation
In their research, An Integrative Model of Organizational Trust1, business scholars Roger Mayer, James Davies and David Schoorman, suggest that there are three key factors that play a key role in the development of trust – namely the ability, benevolence and integrity of the trustee. In light of this research there is a general consensus among psychologists that trust can be separated into two main categories. The first is the ability or competence to carry out obligations and the second involves the intentions or motivation to carry out obligations. Tom Tyler, Professor of Psychology at New York University, believes that the most important aspect of trust in organisations revolves around the motivations or ‘social trust’ rather than the ability or competence-based trust.

So what underpins the creation and maintenance of motivation/intention based trust? First and foremost, treating employees with dignity and respect. The more an individual feels that they have been treated with dignity and respect, the more they will feel a valued member of the organisation. This theory is known as the group-values model, whereby treating staff in a fair and consistent manner can help to communicate the message that each employee is a respected and valued member of the organisation. This in turn can enhance an individual’s self-esteem and confidence in the firm, along with a willingness to accept authority.  An employee who sees the organisation as valuing their role is more likely to trust that the firm will act benevolently towards them. Employees are then more likely to accept the decisions that line and senior managers may have made during the difficult times, even if they don’t like or agree with the decisions that are made. Employees are also more likely to accept that positive outcomes will arise in the future compared with individuals who have not received fair interpersonal treatment, in other words, been treated in a fair and consistent manner, and with dignity and respect.

There is little debate around the positive benefits trust can have on an organisation ranging from heightened commitment, increased job satisfaction, intentions to stay there and satisfaction with leaders. Gregory Rich, Professor of Philosophy at Fayetteville State University in the US, has proven that trust in management has a positive impact on individuals’ sales performance2, while Professor Tyler has shown that trust is linked to high levels of organisational cooperation3.

It’s about fair treatment
The concept of fair interpersonal treatment should not be seen as a means to an end, but should be considered a necessary part of life within any organisation. It should not be solely about direct working relationships, but the company as a whole. Fair treatment needs to become a part of the organisational culture, which will ensure a solid foundation for the development of trust and confidence in the firm. Times of uncertainty and change are extremely stressful for any individual. Yet, if employees trust their employers, as in trusting their motivations/intentions, as opposed to their competence, employees may feel they are able to predict how the organisation will act in the future. This will help to reduce feelings of uncertainty.  This does not have to be about grand gestures but the everyday little things that people take for granted.  For example, the ‘pleases’, ‘thank yous’ and the ‘how are you today?’. It’s about taking the time to listen, making your employees feel they matter, and most importantly, recognising that they do matter.

It takes time to build trusting relations between individuals, and it’s no different for organisations. It’s not easy to build organisational trust, as managers can’t protect individuals from the uncertainty and stress of difficult times. They can, however, aim to achieve a solid relationship built on mutual respect and trust between individuals and management.

ER Consultants has worked with many firms over the years who have been faced with challenging times.  Examples can be seen in all aspects of organisational life, whether this is the result of major restructuring, mergers and acquisitions or difficult market conditions (see our approach opposite and case study below).

The key to getting through the tough times is all about respectful treatment and timely communication.  Do that and trust will, slowly but surely, be built. If employees trust in your motives and believe the organisation will continue to act benevolently towards them, employees are more likely to work at making the company a success, even when, economically speaking, you’re operating on shakey ground.

Case Study:  Scottish Arts Council
ER Consultants has been working with the Scottish Arts Council supporting them through a time of great change and uncertainty. As Scottish Arts, along with Scottish Screen, move closer towards becoming part of a new organisation, Creative Scotland, ER Consultants has taken all employees through a bespoke development programme specifically designed to identify and develop the behaviours that will be required in a different workplace. The programme has focused on building leaders’ and employees’ emotional intelligence and interpersonal skills to help bring out the best in people through stretching high performers and challenging lower performers. An example of that was giving managers practical experiences with professional actors of giving feedback in a sensitive and effective manner. Another example was looking at different styles of communication and how an individual’s preferred approach may not be the most effective way of building a rapport or influencing others.

Building Trust:  The ER Consultants Approach
If you’re heading for a rough patch, when trust is of the utmost importance, there are a series of practical steps you can take to help build and maintain trust. They include:

• Timely and appropriate communication - communication should be frequent and relevant.  Even if information is not available, employees need to be made aware of this.
• Listen and respond to employee concerns - adapt your response styles to suit the individual you are talking to, and ensure you are engaging in active listening.
• Encourage face-to-face communication wherever possible - this is the best way to communicate as you can really pick up a lot of information from a person’s reaction, as opposed to what they are saying.
• Keep all actions transparent to all involved - keeping all actions transparent helps to create an open and honest environment whereby employees can learn to trust the motivations and intentions behind senior management decisions.
• Honour commitments were possible and if you can’t, offer genuine explanations as to why this could not be achieved. Honesty and integrity count for a lot when the going gets tough.

For more information, contact:
Jane-Catherine.Hartshorn@erconsultants.co.uk


References:
1  Mayer, R.C., Davies, J. H., & Schorrman, F. D. (1995). An Integrative Model of Organizational Trust. Academy of Management Review, 20(3), 709-734.
2  Rich, G. A (1997). The Sales Manager as a Role Model: Effects of Trust, Job Satisfaction and Performance of Sales People. Journal of the Academy of Marketing Science, 25(4), 319-328.
3  Tyler, T. R (2003). Trust Within Organizations. Personnel Review, 32(5), 556-568.


© er consultants Topics Issue 2, 2008