Employees and Employers: corporate scandals eroding trust

July 23 2012 - A survey of more than 2000 UK employees commissioned by the Chartered Institute of Personnel and Development (CIPD) has found that only 36 per cent of employees trust senior managers.

The quarterly Employment Outlook survey also found that 58 per cent of workers have a 'not bothered' attitude to their work. It also concluded that employees showing 'neutral' engagement were half as likely to go the 'extra mile' on their jobs and working hours as those who were engaged. They were also almost three times as likely to be searching for a new job. The survey demonstrated strong correlation between knowledge of the organization's core purpose and employee engagement.

Other significant were:

• Only a quarter (24%) of employees felt they were consulted by senior managers about key issues affecting the organization
• Fewer than half (40%) were satisfied with opportunities for upward feedback of views and ideas to senior managers
• Workers who trusted senior managers were more likely to be satisfied with their wellbeing and were less likely to report that they were under stress

The significance of this finding is reflected in Engaged: Unleashing Your Organization's Potential Through Employee Engagement by Linda Holbeche and Geoffrey Matthews where the authors state (p.80):

Managers play a key role in 'creating the environment'. This means propagating a positive climate and tackling the dmotivating factors. Managers need to understand what makes people tick and, on a personal level, must build and maintain relationships of trust. Engaging managers facilitate and empower their staff rather than restrict them.

According to Peter Cheese, Chief Executive at the CIPD:

"Given the number of examples reported in the media in recent months of unethical behaviours and corrosive cultures overseen by senior leaders, it is perhaps unsurprising to see trust in the workplace eroding. What's worrying is the impact this will have on engagement. We know that strong employee engagement drives higher productivity and better business outcomes, so such a prominent display of 'neutral engagement' in the workplace should act as a real wake up call for employers.

"Now more than ever, organizations need to pay close attention to the impact the behaviours of senior leaders is having on the rest of the workforce and consider how they can improve corporate culture from the top down. The HR profession is uniquely positioned to help organizations properly understand existing cultures and behaviours, to re-examine and re-define corporate values and to revisit the way in which those values are reinforced, incentivised and rewarded through the day-to-day behaviours by managers - from the very top down to the front line.

"Employees also need to believe their views are respected and that they have a voice in the organization, otherwise there is a risk that when things go wrong, no-one tells the executive team until it is too late. Just as importantly, empowered and engaged employees are able to provide customer inspired innovation and ensure organizations' products and services adapt quickly to take advantage of fast changing markets.

The root of the issue is the perception by employees that managers have broken the psychological contract. As Linda Holbeche and Geoffrey Matthews state (p.15):

When employees perceive that the terms of their psychological contract have been breached, they reciprocate by withdrawing or making less effort on behalf of their employer. Symptoms of psychological contract breach - such as emotional exhaustion, higher turnover intentions, turnover behaviour and lower job satisfaction, trust and commitment - are now increasingly associated with employee disengagement.

Peter Cheese concludes:

"Building trust in senior leaders and employee engagement requires a shift away from traditional command and control styles of leadership to a distributed leadership model where managers at all levels have the ability to win hearts and minds, and get the best out of their people in the service of the organization."

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