The crisis in trust many organisations are facing can be repaired, but not if we continue to blame the economy and focus solely on senior leadership.
In reality, we all need to recognise that we each have a stake in the future success of the organisations in which we work. That's according to new research published by the Chartered Institute of Personnel and Development (CIPD), which found that the crisis in trust predates the economic downturn and is a function of a breakdown of five types of trust relationship within an organisation[1]. The report's authors are warning that relying on any single one of these relationships will not suffice to build the climates needed to enable the economy to grow and innovate.
The research, led by Professor Veronica Hope-Hailey at Cass Business School, part of City University London, found that the most important types of trust are 'trust in each other' and 'trust in direct line managers' but each relationship is interconnected and trust must be reciprocal. 'In organisations where 'trust in each other' was emphasised, there was a strong and persistent focus on maintaining trust across all relationships; if one became strained, the others were sufficiently strong to maintain overall trust even in the face of pay cuts, redundancies and restructuring. Conversely, in organisations relying exclusively on 'trust in leaders', there was a high risk of trust being eroded when those leaders suddenly (often because of the pressures of the recession) started to make decisions which revealed a lack of ability, integrity, predictability or benevolence.
'Trust in direct line managers' was found to be particularly important, with line managers' actions being pivotal in shaping perceptions of the organisation as a whole. This trust relationship could be eroded if trust between line managers and their senior leaders was not strong. In some workplaces, trust in senior managers fell during the downturn because line managers 'jumped into the trenches with the troops', apportioning blame for cuts on senior leaders.
Veronica Hope-Hailey, professor of HRM at Cass Business School, comments: "Trust is an important asset for any organisation and its employees. When trust has been broken, senior leaders need to show a great deal of humility by apologising for their mistakes and also demonstrate their ability and commitment to putting things right. However, we should all take collective responsibility for building and maintaining trust and employers should encourage their employees to show benevolence towards senior leaders who are trying to do the right thing in the face of adversity. The reality is that times have changed and the days of the paternalistic employer that could offer a job for life are long gone. Employees need to readjust their expectations of employment relationship but employers must remain true to their duty to treat staff fairly and communicate with them about the changes the organisation needs to make. Where employees maintain unrealistic expectations of their employment relationship, which will only serve to erode trust to the detriment of all concerned, employers should work hard to rebuild the employer brand and reframe the psychological contract between employer and employee."
Vanessa Robinson, head of HR practice development at CIPD, comments: "The need for collective responsibility is clear but our research also demonstrates the important role HR can play in building and repairing trust. HR policies and practices give employees important indicators of the trustworthiness of the organisation and HR must play a role in ensuring that approaches to management and leadership within an organisation do not undermine genuinely good intentions. What's more, this research flagged the need (also identified in our Next Generation HR research) for HR to better hold the tension between its stewardship role and its role of business partner; by drawing on business insights and a unique focus on people, HR can instil a culture where everyone has the courage to speak up against the pursuit of short term gains that are to the detriment of employees and the long term success of the organisation."
[1]The five types of trust relationship:
The research, led by Professor Veronica Hope-Hailey at Cass Business School, part of City University London, found that the most important types of trust are 'trust in each other' and 'trust in direct line managers' but each relationship is interconnected and trust must be reciprocal. 'In organisations where 'trust in each other' was emphasised, there was a strong and persistent focus on maintaining trust across all relationships; if one became strained, the others were sufficiently strong to maintain overall trust even in the face of pay cuts, redundancies and restructuring. Conversely, in organisations relying exclusively on 'trust in leaders', there was a high risk of trust being eroded when those leaders suddenly (often because of the pressures of the recession) started to make decisions which revealed a lack of ability, integrity, predictability or benevolence.
'Trust in direct line managers' was found to be particularly important, with line managers' actions being pivotal in shaping perceptions of the organisation as a whole. This trust relationship could be eroded if trust between line managers and their senior leaders was not strong. In some workplaces, trust in senior managers fell during the downturn because line managers 'jumped into the trenches with the troops', apportioning blame for cuts on senior leaders.
Veronica Hope-Hailey, professor of HRM at Cass Business School, comments: "Trust is an important asset for any organisation and its employees. When trust has been broken, senior leaders need to show a great deal of humility by apologising for their mistakes and also demonstrate their ability and commitment to putting things right. However, we should all take collective responsibility for building and maintaining trust and employers should encourage their employees to show benevolence towards senior leaders who are trying to do the right thing in the face of adversity. The reality is that times have changed and the days of the paternalistic employer that could offer a job for life are long gone. Employees need to readjust their expectations of employment relationship but employers must remain true to their duty to treat staff fairly and communicate with them about the changes the organisation needs to make. Where employees maintain unrealistic expectations of their employment relationship, which will only serve to erode trust to the detriment of all concerned, employers should work hard to rebuild the employer brand and reframe the psychological contract between employer and employee."
Vanessa Robinson, head of HR practice development at CIPD, comments: "The need for collective responsibility is clear but our research also demonstrates the important role HR can play in building and repairing trust. HR policies and practices give employees important indicators of the trustworthiness of the organisation and HR must play a role in ensuring that approaches to management and leadership within an organisation do not undermine genuinely good intentions. What's more, this research flagged the need (also identified in our Next Generation HR research) for HR to better hold the tension between its stewardship role and its role of business partner; by drawing on business insights and a unique focus on people, HR can instil a culture where everyone has the courage to speak up against the pursuit of short term gains that are to the detriment of employees and the long term success of the organisation."
[1]The five types of trust relationship:
- Trust in each other - optimistic expectations and productive relations are maintained with customers, among employees and their line managers, and with the organisation and its senior managers, forming a virtuous and reinforcing "circle of trust"
- Trust in leaders - the main emphasis is placed on trusting senior managers, with a tendency to focus on "heroic" or "visionary" leaders
- Trust in the organisation - typical of public sector organisations, this is where individual leaders, whether politicians or CEOs, are less important to employees than the purpose of the organisation itself
- Trust in external relations - senior management and, to a degree, employees, view their central trust relationship as being with key external stakeholders, most often customers, rather than focusing on internal trust relationships
- Trust in the direct line manager - attention is given to maintaining the trust relationship between employees and their direct bosses.
