The Repair of Trust Project was conducted by a team of Academics and CIPD staff between July and November 2011. All of that team have contributed to developing this presentation. My thanks go to the team and all who gave us access to their organisations for this project.

Where has all the trust gone?The Repair of Trust -a CIPD funded research project

Professor Veronica Hope HaileyCass Business School -Veronica.Hope-Hailey.1@city.ac.uk

Everything has to be taken on trust… it’s the currency of living

Tom StoppardRosencrantz and Guildenstern are Dead (1967).

Definitions of Trust?

• A psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behaviour of another” (Rousseau, et al., 1998: 395)

• “An individual's expectation that some organized system will act with predictability and goodwill" (Maguire and Phillips 2008).

Benefits of trust (Dietz, 2011)

Trust levels at work

Employee Engagement (extra effort, job satisfaction, commitment)

Operational Efficiencies

Information Sharing &Knowledge Exchange

Positive Work Climate

Individual, Group & Organizational

Performance

Cooperation & Problem Solving

HRM = higher trust

• Trust levels determined not only by individual experiences & dispositions, but also by the workplace itself - interventions by management make a difference(Blunsdon and Reed 2003)

• HRM policies and practices are claimed to be amongst the most influential areas for trust development (Robinson and Rousseau, 1994)

• HRM has been proven to be a key agent in building and maintaining trust (Whitener, 2001).

Drivers of trustworthiness in Leaders (Dietz and Den Hartog 2005)

Qualitative and Quantitative data

Senior Managers/CEOs 20 1 hour interviews

HR Managers 7030 x 1 hour interviews/ 1 focus group x 40

Middle Managers 30 1 hour interviews

Lower level staff 100 90 minute focus groups

CIPD Employee Outlook 2000 Survey

Research sample

• Ernst and Young• GKN• Cable and Wireless• ABN AMRO• Day Lewis Pharmacy• Orvis• John Lewis Partnership• Norton Rose

• HMRC• Department for Business,

Innovation and Skills• Norfolk County Council• Sunderland C Council• Royal Mail• Hants County Council

Case Study Sample industry sectors

Retail partnerships

Multinational companies

Family businesses

Local authorities

National government / public sector

Professional services firm

Financial services

Locations

Bristol

Bath

Southampton

Reading

London

Norwich

Nottingham

Cardiff

Sheffield

Sunderland

Woking

Birmingham

Amsterdam

Winchester

Do you trust senior management?

CIPD Employee Outlook Survey – September 2011

Trusting relationships

Shareholders

Unions

Customers

Politicians

Trust Predicaments – a typology

Trust in each other – “We’re all in this together”

• Trust relationships run throughout as a virtuous circle and maintained as a trust fund for difficult times

• Senior Managers are held accountable to staff for their leadership of the business and the people – a mutuality relationship

• People management seen as key and staff must “fit” the culture to be employed

• Relationships are personal and individual

Trust in our leaders

• Leaders and their behaviours are key to maintaining sufficient trust levels within the organisation

• Staff look up to their leaders for evidence of trustworthiness

Trust in our organisation

• Primary trust relationship is with the institution and its purpose and value to the external world

• Impersonal relationships as organisation’s purpose is executed through fulfilling bureaucratically defined jobs and roles

Trust for our external customers is key

• External trust relationship with customers is the most important

• Trust relationships within the organisation are “nice to have” but not seen as essential for the business

CustomersSenior Mgnt

Staff

Within each of these there are positives & negatives

Trust in each other – “We’re all in this together”

STRENGTHS

•In adverse times everyone pulls on the large trust fund created during the good times to help each other through

•Huge emphasis on INTEGRITY of leaders

Trust in each other

WEAKNESSES

•In the good times the organisation can become inward looking, overly trusting of its competences, morally superior and not interested in learning from different organisations or people.

•In bad times, staff can be more shocked by difficult decisions which results in higher breach of trust.

STRENGTHS

•Provided leaders can demonstrate their ability, benevolence and integrity they will be able to lead people through adverse times

•Particular emphasis on BENEVOLENCE in leaders (followed by integrity)

Trust in our leaders

Trust in our leaders

WEAKNESSES

•If leaders are found to be lacking at a personal level in Ability but particularly Benevolence and Integrity then trust can collapse

•In good times there can be too little distrust

Trust in our organisation

STRENGTHS

•Strong on procedural justice through promotion of extremely fair HR systems

•Trust is in the systems and the goodness of the purpose of the institution

•Not dependent upon the cult of the individual leader to promote trust

Trust in our organisation/institution- WEAKNESSES•In adverse times if the organisation’s purpose is either under attack or subject to change, trust relations become eroded.•Senior managers may have underdeveloped their individual and relational ability to lead people – little emphasis on demonstrating their benevolence and integrity•Seen as impersonal and more concerned with implementing downward performance monitoring systems which staff interpret as a lack of trust in them•Particularly bad if external stakeholders are critical as senior managers have to attend to rebuilding trust relationships with externals rather than rebuilding internal trust.

Trust for our external customers is key

STRENGTHS•Leaders focus on their ABILITY to keep business on track

•Benevolence of leaders is less relevant as focus is on external rather than internal

CustomersSenior Mgnt

Staff

Trust for our external customers is key

WEAKNESSES•In adverse times, previous lack of attention to internal trust may mean that integrity or benevolence of leaders is questioned.

•Organisations may not be able to relaunch growth through innovation or be an attractive employer in tight labour markets

CustomersSenior Mgt

Staff

Climbing out of the valley of distrust

So – what to do?

How do we rebuild trust? – principles of ubuntu and reconciliation• Those in power are

• “diminished when others are humiliated, diminished when others are oppressed, diminished when others are treated as if they are less than who they are..” Desmond Tutu, 2004.

• Recognise the relationships between the individual and community and the importance of mutuality and trust in that relationship.

• Recognise what was effective in the workplace in 2001 may not be the answer for 2011.

And what does good trustworthy leadership look like?“You’re here on behalf of the people you lead.”

• “Share what you are with people” = be human, take time to treat staff with dignity

• Leaders trusted downwards, didn’t micro manage the workforce (but did visit)

• CEOS who admitted to mistakes and apologised also built trust

• Organisations are not families and senior managers are not parents. They have to take decisions that ensure the organisation’s survival but the WAY they do this must be seen to serve the greater whole not themselves.

• Leaders must not be self serving – leave your ego at home

Actions that maintained trust:

• Importance of senior managers controlling organisational destiny – ability to trade off short term v. long term as in partnerships or family businesses

• Local Communications: relevant, transparent, personal and regular • Presence of Senior Managers who believed themselves in some form to be

accountable to the workforce as well as other stakeholders• Longevity of senior management – no churn of CEOS or MDs

• Norton Rose - Bold ,courageous moves involving the workforce and flexi working• JLP - Employee voice – complaints heard with somewhere safe to go to air views through councils and registry• Day Lewis – personal letters to every employee to their home from the CEO and owner, training maintained• Sunderland CC Values: local boy as CEO : PROUD/DECENT/TOGETHER = mutuality and community• BIS -Transparency of process for restructuring and cuts – talent grid, skills assessment.• HMRC – apologies from senior managers, trusting downwards, local communications, dialogue, local pride and

a new deal

Leadership as belief in people....

“What HRM delivers is a bedrock.”

• Leadership Selection/ Talent Management need to be rethought• Data driven HR tools create procedurally fair restructuring • Orgs who maintained trust also maintained their investment in HR • Communications needs to be a form of authentic dialogue• Create vehicles for employee voice but avoid spin at all times• Regularly measure trust and feed back to Exec Board a reality• Everyone is responsible for promoting good trust relations, not

just HR.

And what of the HR function in 2011?

• Criticisms of some HR professionals as individuals being solely concerned serving overarching organisational aims

• HR function sadly associated with negativity : downsizing, outsourcing, mechanistic pms, badly managed change

• HR needs to be seen to engage in difficult conversations, to be seen to challenge the business on people issues

• Chief Integrity Officer – the Conscience of the organisation?

Next steps

• Practitioner workshop 16th November at Norton Rose, City of London for those who have been researched

• (Dept for BIS and David MacLeod of the Macleod Review both keynote speakers at that event)

• Podcasts of “leading edge trust” organisations speaking at that workshop made available on CIPD website – Sunderland CC, Day Lewis, Norton Rose etc.

• Report on Trust and Trust Repair published New Year 2012• CIPD Special Interest Group for Trust Repair will be established in the New Year