April 3, 2024
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Trust as a foundation of organizational success

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By Vlad Vaiman

I have spent the past 20 years of my life researching the issues of talent management and consulting organizations on what they should do to attract, engage, develop, and retain their most valuable employees. Among some of the outcomes of my work is the framework for talent retention revealing what keeps people with their companies, what makes them engaged and motivated to perform their duties day in and day out — based on multiple interviews with employees and managers across a variety of organizations. 

Some of the factors mentioned by employees were interesting work assignments, professional growth opportunities, flexibility, asynchrony, belonging, and others. 

What I have noticed though was that lately, all these elements have become hygiene factors, or in other words, essential but not sufficient to motivate, engage, and retain employees. So, what should an organization do to reach the desired level of engagement and retention?

It seems that quite a few organizations place extra emphasis on Purpose as the most important factor behind these desired upshots — and apparently, this is wrong. 

Recent research by MIT finds that it is not Purpose that helps motivate, engage, and retain employees, but rather the level and quality of Interpersonal Collaboration (IC). IC refers to everyday connections to and communications with various colleagues — within and across departments, including supervisors and organizational leadership — at work and off work. 

And even though Purpose still plays an important role, it is Trust that is at the foundation of all talent management efforts, including retention.  And here is how it works: Trust cultivates Purpose, which in turn generates Energy, which improves Interpersonal Collaboration, which leads to high levels of engagement and retention.  So, let’s then talk about trust in a bit more detail.

WHAT IS ORGANIZATIONAL TRUST?

The term “organizational trust” is used to describe the degree to which workers have faith and reliance in their employer. Some benefits of a trustworthy workplace environment include, for example, increased job satisfaction and optimism.

When employees have faith in their company, they are more committed to its success.  As a result, employees may feel more invested in the company’s mission and work harder toward its goals.  Productivity also seems to rise when employees have faith in their employer and are motivated to go above and beyond the expected in order to help the company succeed. 

Trust between employees and management can also help to break down barriers to honest and open dialogue. When employees believe they can trust their superiors, they are more likely to work together and support one another. 

Trust can also decrease the rates of turnover in the organization.  That is because employees who have faith in their employer are less likely to leave, which saves money in the long run by lowering the need to replace them and pay for their training and onboarding. 

Finally, trustworthy businesses — through the virtue of a good reputation — have a better chance of attracting and retaining the best employees, clients, and partners. Overall, organizational trust can lead to a more positive and productive work environment, which can benefit both the employees and the organization as a whole.

ACHIEVING ORGANIZATIONAL TRUST

Organizational trust can only grow and be sustained through open, honest, transparent, multi-directional (top-down, bottom-up, and lateral), and consistent communication. Below, I will outline a few suggestions for managers to consider when it comes to the kinds of communication that are crucial for establishing and sustaining trust in any given workplace.

To begin, always communicate clearly and consistently. Whether it is to employees, customers, investors, or the general public, an organization’s message must be crystal clear and consistent. The message must also be true to the organization’s values, mission, and objectives.

Second, learn to be a good listener. Leaders in any organization owe it to their employees and the other parties involved to actively hear them out. This includes creating avenues for feedback, listening to and responding to concerns, and acknowledging and fixing problems as soon as they arise.

Third, maintain openness. Organizations should be forthright in their communications, disclosing their actions, plans, and decisions in a timely manner. Truthfulness about the organization’s successes and failures, as well as its opportunities, challenges and risks, is essential.  

The next step is to prove your credibility. The language and tone of an organization’s communications should be consistent with its values and goals. Communicating in a straightforward and approachable manner that avoids overly formal language is essential.

Finally, remember the importance of timeliness. Organizational leaders need to keep their employees informed and updated as quickly and thoroughly as possible. During times of crisis or uncertainty, when everyone involved, but especially the workforce may be looking for some reassurance or direction, this becomes even more crucial.

By prioritizing these types of communication, organizations can build and maintain trust with their stakeholders, including employees, which is essential for their engagement and retention, and therefore, long-term success.

Dr. Vlad Vaiman is a Professor and Associate Dean at the Cal Lutheran School of Management.