TRUST AN IMPORTANT BUILDING BLOCK. being the boss your employees can trust

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2 TRUST AN IMPORTANT BUILDING BLOCK It is often considered a soft HR issue. It s not about adhering to laws or delineated best practices. However, it is an important building block of a successful organization. Ultimately, trust matters to employees, and for that reason it should matter to employers as well. Trust is the foundation upon which employees build their engagement in the company. 1 It impacts how long employees will stay with a particular company or boss. 2 Importantly, it also has a direct financial impact on a business bottom line. 3 1

3 THE PROBLEM Trust is on the decline on a global scale. In 2002, a Gallup poll showed that 86% of employees trusted their company s leadership. By 2017, the Edelman Trust Barometer found that employees trust in their company s leadership was down to 37%. Some corporate scandals like Enron, for example, have contributed to this decline in trust, but the data indicates the determinative factors for trust are more than just at the highest corporate level. For a business, employee trust, or lack thereof, falls into two categories: The good news is that research has identified the areas where companies and employers can improve. The even better news is that employers can make simple, key changes to better their interaction and treatment of employees. About the authors (1) Trust that a boss will treat them with dignity, integrity, and respect; and (2) Trust that their company s leadership has the competence and integrity to lead the company in a productive direction. The first one is subjective and is directly related to how the employee s boss treats that employee on a daily basis. The second is objective and is directly related to company practices regarding employee compensation and career development. Businesses need to establish both types of trust in order to be successful and have productive employee relationships. However, many businesses and bosses miss the mark on trust, and that failure is reflected in the data. For example, when an employee does not trust their company s leadership, the employee has a 1 in 12 chance of being engaged. 4 However, a boss who takes the time to build trust with that same employee can double that employee s engagement in the workplace. 5 ELISABETH SHAW HR Consultant Assistant General Counsel NINOU FABRIZZI HR Manager 2

4 According to an EY survey TOP 5 REASONS 6 & 7 EMPLOYEES DON T TRUST THEIR: COMPANY DIRECT SUPERVISOR 1 Unfair compensation 1 Not open/ transparent in communication 2 No or very few opportunities for equal pay & promotions 2 Not appreciative/ doesn t provide recognition & praise for a job well done 3 Lack of strong leadership 3 Does not communicate with employees enough 4 High employee turnover 4 Does not value employees points of view 5 Lack of collaborative work environment 5 Does not make wise business decisions 3

5 KEY FACTORS IN BUILDING & RETAINING TRUST Understanding why employees lack trust in a company helps companies develop strategies for creating clear expectations for compensation and opportunities for advancement. Companies that are aware of perceived unfair compensation can establish pay ranges based on experience and industry standards. This will remove any potential bias in the compensation scheme. Companies should also implement periodic performance reviews of managers, employees, and the company as a whole. This allows employees to address issues they see in the workplace and to know when they will have opportunities to discuss their career development. Companies should be prepared to act on the feedback they receive. If employees feel heard, they are more likely to be engaged and committed to the company. Moreover, understanding why employees lack trust in their direct supervisors is similarly useful for identifying how managers can build and retain trust. Transparency is key. Generally, employees want to receive open and honest communication; have their concerns addressed; their accomplishments recognized; feel that they are working towards a common goal; and be treated with fairness, dignity, and respect. Managers should be conscious of their role in their teams experiences with the company. Managers can be instrumental in building their employees trust by acting with integrity with their teams and resolving conflicts. Communication is a fundamental piece of building trust. Good communication requires an ongoing and open dialogue where the company s and department s vision is discussed and the employees role in realizing that vision is defined. Obstacles should be openly discussed, and employees should have the opportunity to voice their opinions, ideas, or concerns. Communication is most successful when there are multiple forums. Team and company meetings, individual one-on-ones, s, or memos can all be utilized to ensure regular dialogue. Managers willingness to share information is a good way to display the respect for and trust in their employees. If there is a void of information, employees will fill it and they will always fill it with negative information. 8 Sometimes, just sharing the absence of information or an update creates an open and honest environment to promote employees confidence in their workplace. A boss should also remember that he/she is a visible representation of the organization. A tough demeanor or mishandling a conflict can form a negative impression and impact the employee s working experience. In times of conflict, it s easy to get wrapped up in the problem at hand, but there is immeasurable value in focusing on 4

6 mutual accountability, displaying a willingness to accept or even extend apologies, and working together to move in a better direction. Even a seemingly insignificant occurrence can make a lasting impression. Therefore, managers should take advantage of each opportunity to display a sense of positivity, fairness, and teamwork. 5 Managers can maintain their employees trust by ensuring that the employees feel a sense of belonging. 9 Acting as a member of the team and relating to employees on an equal level will help your employees bring their guard down. For example, tasks can be delegated with consideration for the employee s workload and ability. Simply asking the employee to take on the task rather than instructing them can relay respect and trigger engagement. The central point to remember is that supervisors conduct symbolizes the ethos of the company. Other ways to motivate employees include directly addressing their fears and recognizing their accomplishments. Most employees are worried about their job security, satisfaction, and opportunity for growth. Employees no longer commit decades to a company. Increasingly, employees change companies more frequently in search of fulfillment and advancement. To promote fulfillment, managers should address those issues head-on. In addition, acknowledging a team member s accomplishments or a job well done fosters a sense of job security and loyalty. Recognizing contributions sets a potential pathway for advancement as employees see their accomplishments and company s vision align. CONCLUSION Most Americans work out of necessity. However, they get to choose how and where they fulfill that need. They seek satisfaction and possibilities for advancement. If employees trust the direction and they have a place in the company s growth, their efforts will be more apparent. Most American workers trust their CEO to do the right thing they just aren t sure their CEO knows where the company is going. 10 It is up to the direct supervisor to communicate how the employees work aligns with the company s vision. Transparency and collaboration will promote engagement and reduce turnover by building the trust your employees seek. SPECIAL OFFER! $285 Corporate Climate Analysis EMPLOYEE CLIMATE SURVEY 1-HOUR HR CONSULT EXPERT ADVICE SIGN UP TODAY! Visit MBAhro.com/ClimateAnalysis 1 Hickman, A and Fredstrom, T. (2018, February 7). How to Build Trust with Remote Employees. Gallup Blog 2 Pendell, R. (2017, June 7). CEOs: Do Your Employees Trust You? Gallup Blog 3 Bingham, S. (2017, January 2). If Employees Don t Trust You, It s Up to You to Fix It. Harvard Business Review 4 Hickman, A and Fredstrom, T. (2018, February 7). How to Build Trust with Remote Employees. Gallup Blog 5 Id. 6 Twaronite, K. (2016, July 22). A Global Survey on the Ambiguous State of Employee Trust. Harvard Business Review 7 Id. 8 Quoting Dougherty, J. O Hara, C. (2014, June 27). Proven Ways to Earn Your Employees Trust. Harvard Business Review 9 Hickman, A and Fredstrom, T. (2018, February 7). How to Build Trust with Remote Employees. Gallup Blog 10 Pendell, R. (2017, June 7). Do Your Employees Trust You? Gallup Blog

7 ABOUT US MBA provides its clients with strategic HR consulting and customized, technology-based solutions for all your HR, risk management, benefits, and payroll needs. MBA s extensive history working with the franchise industry enables us to provide franchisees with sophisticated outsourcing and advice uniquely suited to their business. MBA is not your average professional employer organization. Our expertise in drafting and implementing company policies helps employers provide a fair playing field and clear expectations for their employees. Our consultants are available to assist with the resolution of management and employee concerns. We also provide customized training for managers on a variety of topics, which can help employers create healthy work environments. MBA is a trusted advisor and single point of contact for human resources consultations, payroll processing, risk management compliance, and benefits administration. For more information, visit MBA at MBAhro.com The IRS does not endorse any particular certified professional organization. For more information on certified professional employer organizations go to 6