Rebuilding Employee Trust

Shari Caudron

Workforce

October 2002, pp. 28-34

A recent Watson Wyatt survey of nearly 13,000 workers in all job levels and industries revealed that fewer than two out of five employees today have trust or confidence in their senior leaders. In addition, the three-year total return to shareholders is almost three times lower at companies with low trust levels than at companies with high trust levels.

Though senior leaders obviously play the key role in building trust, the key predictor of employee trust is the effectiveness of an organization’s HR function. In companies where the employees believe that the HR department is effective, 62 percent of workers also believe that the organization is trustworthy. In companies where HR is deemed ineffective, only 8 percent of employees believe that management can be trusted.

The five things that HR departments do to keep trust high are:

(1) Communicate openly about company performance, explain the rationale behind decisions, and encourage employee involvement and information-sharing;

(2) Communicate the value of benefits;

(3) Make constructive changes based on employee input;

(4) Communicate the company’s business goals and explain to the employees their role in achieving those goals; and

(5) Hold poor performers accountable through discipline and termination.

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