Updated: Apr 25, 2022
HR professionals and managers worldwide face a monumental challenge: how exactly can they deliver a workplace experience that meets the needs of today’s evolving workspace?
And as a strategy consultant and author Amanda Setili aptly said in a piece for SHRM, trust is central to how quickly and efficiently any organization can respond in the face of the level of changes and economic uncertainties of the current economic environment.
Wondering why we need more trust in today’s workplace? Well, trust in the workplace is directly proportional to growth and innovation, both of which are key factors for success in today’s evolving workplace. Here are a few questions to help you gauge the level of trust and distrust in your organization:
Do your employees have to seek approval for every little thing, or do they make intelligent, rational decisions knowing they’ll enjoy the support of their leaders?
How often do your employees seek help from HR in the face of challenges, or do they continue working, albeit inefficiently?
Trust and Distrust in today’s workplace
While analyzing several studies and research on organizational trust in today’s corporate sector, we uncovered a very interesting revelation.
52% of business leaders say trust is higher at their workplace than before COVID-19, according to a joint report by The Workforce Institute and Workplace Intelligence.
69% of employees say they don’t trust HR in another survey by career site Zety.
This leads us to wonder; Have leaders and employers made a mistake, overrating the level of employee trust within their organizations? Or, is trust in the workplace painfully low to the point where leaders and employers still feel the condition is better today even with 69% of employees still not considering their leaders as friends they could trust? Either way, we have a problem and a very big one at that!
Why is trust important in an organization?
As individuals, trust is a high priority in just about all of our dealings. Trust allows people to rely on others without feeling the need to safeguard themselves.
Lack of trust in your organization will create downturns in productivity and efficiency and hold your company back from its full potential. Building trust is the foundation for developing profitable relationships with customers, suppliers, and employees.
You can foster greater levels of trust in the workplace by always being open and transparent with your employees. Remove all ambiguity about what is expected of them and be honest, supportive, and consistent.
Managers who encourage a culture of trust will benefit from employees who get on with their work without second-guessing themselves or feeling the need to watch their back. These types of challenges are emotionally exhausting, destroy morale, and reduce engagement in the workplace.
High morale is incredibly important to the future of any company. Team members who are proud to show up to work are more productive and tend to deliver exceptional customer service, which are cornerstones to generating profit and growth.
How is trust related to culture in the workplace?
Values and trust define corporate culture, and managers spend a great deal of energy searching for employees they can rely on and who will stay for the long term.
Employees who feel trusted are more likely to see themselves as valuable team members, which is a critical component of job satisfaction. Team members who are happy in their work are less likely to take their experience and skillsets to the competition.
Examining the official definition of trust gives us clues about how trust and workplace culture are inextricably entwined.
Trust is defined as “the confident expectation of something; hope,” and also “the obligation or responsibility imposed on a person in whom confidence or authority is placed."
This tells us that trust is not just an act of confidence, but it is also a responsibility of someone on whom others rely.
Every action you take either strengthens or erodes trust. For example, an overly critical boss who micromanages employees will have difficulty establishing trusting relationships. Employees who are careless or late will have their reliability questioned.
Putting trust in someone always carries risk, but when you do, you must behave in a way that allows their best traits to come to the fore. Employees will respond favorably to a leader who prioritizes trust in this way.
Building a high trust culture can be challenging at first. However, as trust builds, chaos in the workplace recedes, and the company can achieve its goals more quickly.
What is the role of trust in leadership?
Employee trust improves the quality of all relationships in the workplace and can influence the quality of every work-related outcome.
People will not give the best of themselves to leaders they don’t trust. Work will continue, but creativity, enthusiasm, and productivity will suffer. The weekly paycheck is no longer the only currency worth showing up for because employees put a great deal of value in being essential members of the team and part of a company’s success.
In short, if leadership wants to build a winning team that is in line with the company's vision, they need to start with a foundation of trust, because that’s how creativity and engagement are encouraged to grow.
How does organizational trust benefit workforce performance?
Low levels of trust in an organization have consequences in efficiency, customer satisfaction, and staff turnover.
High turnover rates are detrimental to productivity and impact customer churn as well. Slower execution speeds are also a damaging characteristic of a low-trust work environment and can significantly impact production costs.
Losing skilled employees is a huge loss for companies and replacing them can cost even more. When it comes to customer turnover, replacing revenue from a lost customer usually costs much more than retaining them.
Research reveals that a high-trust organization improved total returns to shareholders 286 percent higher than low-trust organizations.
According to the research, trust influences two values: speed and cost. High trust improves speed and reduces costs, while lower trust levels reduce speed and increase costs (source).
In general, managers who build a culture of trust will enjoy:
Employee engagement and retention
Reduced stress levels for employees
Improved decision making
Clearer lines of communication
Improve integrity in the marketplace
How to build trust and credibility in an organization
If your employees don’t trust you, it’s most likely because you’ve failed to earn it. The good thing, however, is that this can be built over time. Companies, where employees feel their leaders are more open and honest, have been found to outperform their competition consistently. The tips below will help your organization build and foster trust with workers;
Help employees create their boundaries
Today’s employees want more choice and control of their space. So, leaders have to get employees actively involved in the processes leading up to decisions on setting both physical and mental boundaries.
Prioritize employee wellbeing and engagement
Improved employee engagement can mean higher satisfaction levels and a higher-performing workforce. Trust becomes stronger when employees know that HR and leaders are not overly committed to the organization’s interests at the expense of their wellbeing and happiness.
Show competency and commitment
Today’s workforce is more discerning than ever. Leaders have to demonstrate competency and true commitment to earn the trust of their employees.
Communicate clearly and regularly
Ambiguous and unclear communication breeds distrust. Along with focusing on clarity of communication, employers should also communicate regularly whether it has to do with providing work updates or feedback on reported issues and actions taken.
Forge stronger connections and relationships with workers
Finding common grounds with your employees can help connect with them on a deeper level. HR and business leaders should focus on cultivating stronger relationships with their employees to promote trust. This requires a certain level of emotional intelligence on the part of HR and the leaders.
How do you measure organizational trust
You can’t display the economics of trust on an invoice statement, but they reveal themselves as other problems that impact profitability. So, the first step in measuring organizational trust is to collect the necessary data.
The most efficient way to gather data is through employee surveys which could include questions such as:
Do you understand the core values of the company?
Can you rely on management to provide clear guidance?
Does management deliver on promises?
Do you think there is enough flow of information across departments and between team members?
Do employees keep themselves accountable?
Do you believe team leaders adhere to the principles of accountability?
You can create more meaningful data sets by segregating your employees according to the length of service, roles, and education levels.
The importance of trust cannot be overstated in today’s highly varied changing workforce. According to the research by The Workforce Institute, while about 50% of employees say trust could impact their sense of belonging within an organization, 68% would base career choices and decisions on trust and 68% admit it could impact their daily efforts.
Evidence gathered from empirical studies on organizational conflict and its management revealed a connection between organizational trust and organizational conflict. In this regard, it might be best termed 'consequential. Moreover, a lack of cooperation may lead to disagreements or misunderstandings over task performance, which may lead to interpersonal conflicts or power struggles between employees and management, which may escalate into organizational conflict. In an organization, organizational trust remains the most effective mechanism for resolving conflict and creating a culture of trust.
The business cost of a distrustful and disengaged workforce is too expensive. The ability to rebuild employee trust is a crucial component of organizational growth and adaptation in today's evolving workplace, so organizations seeking to adapt and increase their productivity should invest in training management on how to effectively rebuild employee trust.
Get the Organizational Trust and Organizational Conflict Management framework, a valuable tool that assists organizations of all sizes in identifying how conflict impacts the business and how to minimize conflict through trust. Download the free Organizational Trust and Organizational Conflict Management framework here.
This article was written by Fawn Hentrel, Managing Partner.