Re-examines the issue of trust and explores why trust matters in the workplace and what can be done to repair it.

In times of uncertainty, trust becomes more important. The Edelman Trust Barometer in January 2012 reported some depressing results: the global financial crisis and the demise of high-profile banks, and the government rescue plans that followed, have profoundly destabilised public confidence, resulting in a breakdown in trust in government and business.

The UK public’s cynicism has been stoked by the MPs’ expenses scandal, high-profile organisational failures (such as the BP disaster in the US), the unveiling of News International’s phone-hacking practices, the 2011 summer riots and the ongoing eurozone crisis. Cuts to national and local public services have been reported alongside the reinstatement of high bankers’ bonuses in the very institutions taxpayers so recently bailed out – a decision perceived as incomprehensible to those experiencing a reduced standard of living.

Does it really matter for society whether trust is up or down like the weather? The answer is yes, trust does matter. We rely on certain levels of trust to function and prosper. Trust is critical for building the foundations of social order; it is the basis for civil society. What of the workplace – what’s happening there? Is trusting your colleagues essential, or simply a ‘nice to have’? These are relevant questions for HR practitioners.

In the workplace, one distinct advantage of trust is its link to innovation. Some economic commentators argue that for UK plc to return to growth and restore job opportunities, innovative approaches will be key.

No one is going to take a risk unless they know that they will be backed and trusted by their immediate and senior managers. For small- to medium-sized enterprises, innovation will fuel growth, and that has to be good for our economy. In the public sector, managers will have to rethink the way they deliver services – we need people to spend time reinventing forms of delivery, not simply hacking away at the size or volume of existing practices.

Another distinct benefit is that ‘high trust’ workplaces find it much easier to embrace organisational change – they can adapt faster and will achieve better levels of employee engagement at all levels. At times of high uncertainty, having a boss or CEO that they really trust can encourage employees to take the plunge and try something different. Furthermore, we know that trust encourages successful co-operation and teamwork, less labour turnover, promotes and facilitates partnerships and joint ventures and decreases operating and transaction costs (managers can spend less time monitoring staff). It also has important benefits for promoting employee well-being and motivation.

So, understanding how to maintain and not lose trust in the first place becomes a key management contributor to better business performance. There is an old Dutch saying: ‘Trust comes on foot, but leaves on horseback.’ It’s far better to keep the trust of your workforce than risk throwing it away. However, if a breach of trust does occur, how can organisations mend and repair these trust levels. How can you restore the faith of a workforce after downsizing and restructuring? These questions should be the heartland of HR practice and so we at the CIPD felt it right to commission a team to conduct research into trust repair.

We were surprised and delighted by the number of organisations who volunteered to take part in the project. Sadly we had to turn some away because the logistics were not possible, but we collaborated with 14 leading-edge employers such as the John Lewis Partnership, major government departments such as BIS and HMRC and smaller but rising stars such as the Day Lewis Pharmacy Group. We also draw on results from the CIPD Employee Outlook survey. 

This research has been very rewarding because we did find some ‘good news’ stories of organisations that, against all odds and to our surprise, managed to raise levels of trust during difficult times, including the public sector. We learned how medium-sized family-owned businesses had managed to maintain trust because of the courage and beliefs of their chief executives. And we also learned how some employers are investing in actions to repair trust, to rebuild workplace relations. We also developed a typology of trust relations so that you can match your own organisation against different foci and assess whether this focus is right for you as an employer. All of this is contained within this report.

None of this is to suggest that the maintenance and repair of trust is an easy option. A focus on valuing trust does require all of us, including senior managers, to have a genuine concern for a company’s moral and ethical principles. While it’s easy for us all to blame the fall-out from the global financial crisis and the actions of bankers as a sort of contagion from outside destabilising trust within organisations, in truth that is not really the full story. If we look at research on workplaces within Britain, the fact is that the breakdown of trust within some organisations both preceded the financial crisis and was prevalent across both private and public service sectors. So this decline in trust levels may also be symptomatic of deeper concerns in the UK about the nature of employment, the intentions of employers towards their workforces, and changes in employees’ expectations of both their employers and their senior managers in the twenty-first century.

The report sets out the key insights for trust repair in the executive summary in the next few pages. These are collected under the following headings:

  1. Why trust matters
  2. Who trusts whom?
  3. Creating a trust fund
  4. Leadership as service – developing trustworthy leaders and followers
  5. Kill spin
  6. Re-engaging the middle and local – sowing the seeds of trust through the levels
  7. Repositioning the employment relationship – establishing twenty-first-century expectations
  8. Where is HR – new contributions for the profession?
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