Trust and the employment relationship
The Institute of Personnel Development
suggested in its statement People Make the Difference (1994) that
building trust is the only basis upon which commitment can be generated
(Armstrong, 2006). The Institute of Personnel Development commented that: ‘In
too many organizations inconsistency between what is said and what is done undermines
trust, generates employee cynicism and provides evidence of contradictions in
management thinking’ (Armstrong, 2006).
It has also been suggested by
Herriot et al (1998) that trust should be regarded as social capital –
the fund of goodwill in any social group that enables people within it to
collaborate with one another (Armstrong, 2006). Thompson (1998) sees trust as a
‘unique human resource capability that helps the organization fulfil its
competitive advantage’ – a core competency that leads to high business
performance. Thus, there is a business need to develop a climate of trust, as
there is a business need to introduce effective pay-for-contribution processes,
which are built on trust (Armstrong, 2006).
The meaning of trust
Trust, as defined by the Oxford
English Dictionary, is a firm belief that a person may be relied on (Armstrong,
2006). An alternative definition has been provided by Shaw (1997) to the effect
that trust is the ‘belief that those on whom we depend will meet our
expectations of them’. These expectations are dependent on ‘our assessment of
another’s responsibility to meet our needs’ (Armstrong, 2006).
A climate of trust
A high-trust organization has been
described by Fox (1973) as follows (Armstrong, 2006):
Organizational participants
share certain ends or values; bear towards each other a diffuse sense of long-term
obligations; offer each other spontaneous support without narrowly calculating the
cost or anticipating any short-term reciprocation; communicate honestly and
freely; are ready to repose their fortunes in each other’s hands; and give each
other the benefit of any doubt that may arise with respect to goodwill or motivation
(Armstrong, 2006).
This ideal state may seldom, if
ever, be attained, but it does represent a picture of an effective organization
in which, as Thompson (1998) notes, trust ‘is an outcome of good management’
(Armstrong, 2006).
Developing a high-trust organization
As Thompson (1998) comments, several
writers have generally concluded that trust is ‘not something that can, or
should, be directly managed’ (Armstrong, 2006). He cites Sako (1994) who wrote
that: ‘Trust is a cultural norm which can rarely be created intentionally because
attempts to create trust in a calculative manner would destroy the effective basis
of trust’ (Armstrong, 2006). It may not be possible to ‘manage’ trust but, as
Thompson argues, trust is an outcome of good management (Armstrong, 2006). It
is created and maintained by managerial behavior and by the development of
better mutual understanding of expectations – employers of employees, and
employees of employers (Armstrong, 2006). But Herriot et al (1998) point
out that issues of trust are not in the end to do with managing people or processes
but are more about relationships and mutual support through change (Armstrong,
2006). Clearly, the sort of behavior that is most likely to engender trust is
when management is honest with people, keeps its word (delivers the deal) and practices
what it preaches (Armstrong, 2006). Organizations that espouse core values
(‘people are our greatest asset’) and then proceed to ignore them will be
low-trust organizations (Armstrong, 2006). More specifically, trust will be
developed if management acts fairly, equitably and consistently, if a policy of
transparency is implemented, if intentions and the reasons for proposals or
decisions are communicated both to employees generally and to individuals, if
there is full involvement in developing HR processes, and if mutual expectations
are agreed through performance management (Armstrong, 2006). Failure to meet
these criteria, wholly or in part, is perhaps the main reason why so many performance-related
pay schemes have not lived up to expectations (Armstrong, 2006). The starting
point is to understand and apply the principles of distributive and procedural
justice (Armstrong, 2006).
References
Armstrong, M, 2006, in The Employment relationship, A
Handbook of human resource management practice, 10th edn, Kogan Page,
London UK, pp. 220-222
Fox, A, 1973, Beyond Contract, Faber and
Faber, London
Herriot, P, Hirsh, W &
Riley, P, 1998, Trust and Transition: Managing the employment relationship,
Wiley, Chichester
Institute of Personnel
and Development, 1994, People Make the Difference, IPD, London
Shaw, RB, 1997, Trust in the Balance,
Jossey Bass, San Francisco, CA
Thompson, M, 1998,
Trust and reward, in Trust, Motivation and Commitment: A reader, ed
Stephen Perkins and St John Sandringham, Strategic Remuneration Research
Centre, Faringdon
The dynamic and often nebulous nature of the employment relationship increases the difficulty of managing it. The problem is compounded because of the multiplicity of the factors that influence the contract – the culture of the organization, the prevailing management style, the values, espoused and practiced, of top management, the existence or non-existence of a climate of trust, day-to-day interactions between employees and line managers, and the HR policies and practices of the business (Armstrong , 2017).
ReplyDeleteEmployee relationship viewed as an advantageous approach that offers mutual values for employees and employers. Major values promised to employees are the greatest possible satisfaction of their individual needs, while the increased attraction, retention, motivation and performance of employees are values promised to employers (Wargborn, 2009)
ReplyDeleteGoodwin (1996) argues that communal relationships between employees and customers in service transactions alter the nature of the transaction by changing the manner in which each party responds to the other. We extend this assertion by suggesting that ``interpersonal’’ relationships (consisting of knowledge driven and communally motivated interactions) will have a positive differential impact on a consumer’s tendency to offer positive comments to others regarding the firm.
ReplyDeleteHoe (2007) states that, if there is no trust, employees tend to become defensive about their actions owing to the fact that each action needs to be justified and supported by objective information, which inhibits organizational learning. He also points out that interpersonal trust is essential for the success of organizational learning.
ReplyDelete