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30 October 2007
The views expressed here are the personal views of the participants and are not necessarily the views of their organisations.
The following people were present at this fe3 mindstretch®:
After welcoming everyone Karen said that notes for the session might be limited as Gary was absent. She then introduced a very rough agenda of the day. She noted that trust was a complex issue in terms of research, hence the need for the definition, and that some more modern measures of trust appear to take their basis from much older, and possibly more tested measures in organisational psychology. She also said that much of the literature made the assumption that trust in organisations was a positive things, and that this needed testing.
The group considered why trust might be important; the comments included that trust stops stress for individuals, that trust might be a value that lost of people hold, and that trust cuts down on debate. Other comments were that trust enables proper dialogue and helps to clear up misunderstandings, encouraging people to share information. A final comment was that trust was a pre-requisite for building good relationships.
Karen then showed some of the research from the literature about why academics considered trust important – much of it linked to its relationship with other organisational outcomes. She suggested that without trust, HR practices which are developed to help organisational performance don’t produce good outcomes. For example, an organisation introducing appraisal or internal promotion processes, or an Employee Assistance Programme is unlikely to reap any potential rewards in performance if employees doubt the motives behind such actions.
As such trust acted as an important mediator between HR practices and performance, and to a large extent, this has been captured in studies which look at the changing state of the psychological contract, of which trust is an integral part.
Organisational commitment is the extent to which employees are attached to their organisation for its own sake rather than because it provides a job that pays them. The concept of OC has been linked to retention, organisational citizenship behaviours and pride in the organisation. In studies, trust is found to correlate significantly with organisational commitment.
Employee cynicism is a general and specific attitude characterised by frustration, hopelessness and disillusionment, as well as contempt and distrust of business organisations, executives and/or other workplace objects. (Andersson, 1996)
Organisational cynicism is a negative attitude towards one’s employing organisation comprising three dimensions – a belief that the organisation lacks integrity, negative affect towards the organisation and tendencies to disparaging and critical behaviours towards the organisation. (Dean et al 1998) Trust is always missing in cynicism.
There was some discussion around three examples Karen presented. The first was of the BBC. According to media reports, the BBC admitted broke guidelines in a vote to name a cat on children’s programme Blue Peter, at the same time also revealing three other breaches of editorial rules. BBC 6’s head of programmes Ric Blaxhill has resigned after two further incidents of fictional competition winners on his station were admitted.
In the discussion, there was focus on the place of the BBC as a great British institution and also about the action that the BBC was taking. Karen said that the immediate action was to impose a moratorium on all competitions for which the public call in.
She also read from press coverage which said that the BBC was reviewing contracts to ensure staff understood their responsibility for upholding editorial standards, that it has dismissed people for breaching the rules and that it was commissioning a major new online project to help the public understand how media content is produced.
To general (rather cynical) laughter from the group, she also read that “All 16,500 BBC production staff will undergo was the corporation called an ‘unprecedented programme of editorial training’ called Safeguarding Trust. The training materials will be made available to other broadcasters and producers.”
Moving on to the example of Barclays Bank, Karen recounted another piece of media coverage. In April 2004, Barclays ran an experiment, placing a sign in the window of a branch in Croydon, inviting any passer bye to walk in and collect a fiver. No-one did. The group wondered whether this was specific to Barclays or rather part of a general lack of trust towards banks.
Finally, in October 2001, the Red Cross announced that it would stop asking for donations of the September 11th attacks, after an unprecedented amount of $547 million dollars was pledged.
The reason? The organisation had come under harsh criticism after revealing it would not use all of the money it had raised to meet the needs of victims of the World Trade Centre attacks, and their families. The scandal over the Red Cross’s use of funds and the way in which it appealed for them, led to the resignation of Red Cross President Bernadine Healy, and the Red Cross brand was damaged in the US for several years afterwards.
Moving from these high profile media examples, Karen moved on to some thoughts about the trust between management and employees.
According to a survey carried out by Ceridian Centrefile and HR magazine, not only do nearly half of employees not trust their employer, but the same survey revealed that more than 54% of HR professionals were convinced that if employees were allowed to control their own work lives in terms of hours and place of work, sickness and absenteeism would fall dramatically – so why isn’t it happening?
Although Karen thought that the survey results indicated a lack of trust, the group wondered whether it was down to an over-optimistic view from HR Managers and that the lack of trust was more to do with managers, rather than HR Managers.
Another reason why employees might not trust their management is that they’re led by the Chief Executive.
Karen noted that in The Republic, Plato stated that no-one in a community should earn more than 5 times the pay of the average worker – yet in the 90’s US CEO salaries rose on average 571% compared with an increase of 37% for average employees according to the US Institute of Policy Studies. In this year’s survey in August, the average CEO weekly salary of $207,700 was seven times the ANNUAL salary of an average worker.
Perhaps even more worrying are the comparisons which indicate that a CEO laying off more than 1000 workers earned an average of $23.7m while CEOs without the task of laying off workers earned an average of $13.1m (reported 2005). Karen thought that this might have a considerable impact on the level of trust between employees and management.
A survey by PR company Edelman (3,000 respondents, 18 countries) has indicated that US brands appear to have an image problem in Europe – ExxonMobil, Coca-Cola, McDonalds and Citigroup received low trustworthiness scores from UK, French and German respondents – Europeans reluctant to embrace brands conveying an American lifestyle or in case of ExxonMobil, those from industries associated with geopolitical turmoil. This survey also revealed a deep mistrust of Chief Executives – fewer than one in five UK, French and German respondents trust CEOs statements on their companies – an all time low.
HOWEVER….
The same survey also concludes that business is regaining the trust of the public, with business more trusted than government in every continent.
So, she concluded, trust is in short supply. But what is trust?
Perhaps one of the reasons that there is no consensus of the definition of trust is that it can be applied in three different ways: in organisations (between management and employees); between organisations (for example supplier and client, or knowledge intensive firm and marketing firm, as in pharmaceuticals) and between organisations and customers.
Add to this complexity that researchers believe that there are three parts to trust – a belief (i.e. that someone else is trustworthy); a decision (to trust someone) and an action (i.e. to participate in more risky behaviour as a result of this trust). There was some discussion about whether there should be another part added – that of trust as a value – or a predilection to trust.
Although there’s no one definition, there are some consistent elements to the concept of trust, for example, favourable or positive expectations. In addition, there was an emerging view that trust and mistrust were not simply at opposite ends of the same continuum.
Following on from this, Karen presented a possible framework to illustrate this, based on Lerwicki et al (1998). Here, trust and mistrust are two different concepts, leading to the possibility of being high on trust AND high on mistrust. Karen thought this was interesting, and also what made measuring trust potentially problematic – that while employees, for example, may be prepared to trust managers with information about their work, but wouldn’t be prepared to trust managers with information about their personal lives. They may also have absolute trust in their work colleagues, but none in other work groups.
Moving on to measurement , Karen suggested that some “new” tools to measure trust may not be so new after all. She went on to talk about the four elements generally considered to be part of the trust concept.
Competence – refers to the other party’s capabilities to carry out their obligations in terms of skill and knowledge.
Benevolence – refers to benign motives and a personal degree of kindness towards the other party and a genuine concern for their welfare.
Integrity – involves adherence to a set of principles acceptable to the other party, including honesty and fair treatment, and avoidance of hypocrisy.
Predictability – relates specifically to consistency and regularity of behaviour.
Each of these components is significant in itself – would trust flounder if any of these things were absent?
The next slide detailed a model of trust from an American consultancy. This also included two other elements of Pride and Cameraderie to make A Great Place to Work®.
Comments from the group wondered about the specificity of the items to measure in Fairness and the absence of ethics in the model, which seemed a strange thing to omit.
Moving to a model which tracks the process of psychological contract violation , Karen said that at first sight, this appeared to have little in common with the previous model.
A variety of elements influence an employee’s perception of the seriousness of a violation of the psychological contract either positively (+) or negatively (-);how much choice the organisation had in breaking the contract, how fairly the process was followed to make a decision, whether the employer made efforts to rectify the violation and whether the explanation for the violation was credible.
How the employee views the violation may have a negative effect on their commitment and motivation, which in turn has an effect on how carefully they monitor for other violations. As increased monitoring is likely to lead to increased perception of other violations of the contract, this also impacts how seriously the employee saw the initial violation.
Karen said that she thought the model as it stood had some interesting correlations with the previous model, but wanted to look particularly at “Perceived procedural justice”. Procedural justice sounds just as it is – the fairness of how things are done. The theory maintains that people can see beyond short term decision outcomes and under certain circumstances, willingly make sacrifices. There are two elements of this – one is instrumental in that they can see that fair process, over time, will enable them to win their share of favourable outcomes. The other is psychological in that fair dealing carries symbolic value, signalling respect for the dignity of the individual and confirming his or her status in the workplace.
Procedural justice is one of the most researched concepts in the literature. There are a number of elements to procedural justice:
Beyond the processes, there is also a social dimension to consider. This is called interactional justice. Recent research shows people pay attention to the treatment they get from the decision maker, how they are told, etc. Key elements of this are:
This process won’t enable management to make thousands of people redundant and come up smelling of roses – but it may a) stop employees who are leaving being as negative as they might have been and b) give comfort to those left behind.
Procedural justice has been shown to be a consistent predictor of employees’ reactions to their bosses and to their organisation – both in a positive and negative sense.
Finally, the group discussed whether trust in organisations had any drawbacks. The majority of scholars connect trust with increased performance and also increased efficiency (less need to regulate and monitor, reliance on people’s word rather than documentation, leading to reduced transaction costs). In addition, trust facilitates a willingness to take a chance on the organisation (and become vulnerable) without fearing exploitation.
Finally, both a blessing and a curse is the extent to which trust can be influenced by leadership behaviour.
Researchers have found that employees prefer to work in organisations that promote trust. However, it has its drawbacks.
Trust takes a great deal of time to build and very little time to destroy – much in the same way as reputation. It’s fragile and managers need to be ever-vigilant in protecting it. For some commentators, trust is a very inefficient way of doing business, particularly when things go wrong, and significant investigation is required – often with little in the form of paperwork.
An emerging concern in the literature is that too much trust between different organisations restricts innovation. Too much trust locks people into behaviours and relationships that restrict their ability to forge other ties outside the relationship, leading to an unnecessary limit to access to new ideas and new technologies. There is also concern that too much trust between employees and management leads to complacency and a lack of questioning.
Trust is influenced by level of employee – so senior managers are likely to have more trust as both their risk, and their reward, is greater. Again, although trust can be modelled by senior executives, it places them under greater scrutiny from employees and more often than not, their focus is on shorter-term targets – which may lead them to “break trust”, particularly in terms of behaviour.
Finally, although perhaps a bit negative, Karen wondered whether, given the choices needed to be made by senior management, forced on them by circumstances, breaking psychological contracts of employees is inevitable and therefore the development of trust long term is never really possible.