Why Trust Matters

The Trust Factor

I have always been clear about the criticality of trust in every relationship, but it is always nice to get some statistical validation from a credible source like HBR in this recent post- https://hbr.org/2011/12/why-trust-matters-more-than-ev/.

As a recovering HR executive I have preached this message for some time, similar to my rants about the absurdity of leaving the gains from employee engagement behind because you think they are too soft and squishy to measure or impossible to create and leverage.

Trust is all about forming relationships from a different perspective. Taylorism, commonly known as scientific management is as dead as the hardbound encyclopedia.

I was discussing the other day a difficulty a colleague was having helping a client understand that occupation and personhood are separate and distinct. Many of her clients see their entry level, unskilled employees as a caste rather than performing activities. They complain that those workers are focused exclusively on the next quarter or fifty cents per hour rather than the big picture.

They are missing the point on two levels-

·        Maslow’s Hierarchy, is as relevant today as it ever was. When you are in safety and survival mode you aren’t focusing on the big picture and how to become engaged. You are focused on basic issues like food and shelter. We saw an epic drama unfold on social media earlier this year with the young woman from Yelp writing an open letter to the CEO that she couldn’t survive in the Bay area on what she was making.

·        Line of Sight, I tell my clients that line of sight may be the most important part of their compensation strategy. The importance of compensation strategy and performance management is to align efforts with outcomes. Employees need to see clearly how positive outcomes for the organization translate to positive outcomes for them and vice versa.

A survey conducted by Sibson & Co., an international compensation consulting firm had some interesting conclusions about employee’s perceptions about their compensation.

- While a significant majority of employees surveyed 65% indicated they were satisfied with their pay level (their salary range compared to other positions) and 71% indicated they were satisfied with their current pay, 57% of the employees surveyed indicated that they were dissatisfied with the way their employer awarded pay. For the purpose of this study process means the determination of individual pay increases, promotion decisions, and progress through the pay structure.

- 16% of the employees also indicated that they were highly likely to leave their current employer.

- Most employees still highly value traditional forms of pay increases, with 19% rating merit pay number 1, 20% overtime pay, 18% cost of living allowances, and 12% individual incentive opportunities.

- The survey found little difference between the generations about compensation.

This reinforces that the idea of “equity” in terms of perceived fairness and the rationality with which pay is delivered is equal to or higher in importance to the rate themselves above “living wage” thresholds.

So what does the survey tell us, a couple things.

·        Employees don’t understand and therefore trust the way compensation is delivered in their organization.

·        Once they get above that living wage/survival threshold that sense of trust and equity becomes increasing important.

Stephen MR Covey in his brilliant book, The Speed of Trust, describes trust as operating at three levels; Deterrence or rule based, Knowledge or competency based, and finally and most importantly Identity- based.

As a former executive and HR practitioner I can assure you that my colleagues in the compensation business swaddled themselves firmly in those first two levels, ranging from “compensation strategy is need to know and you are not cleared for that, or alternatively developing models that looked awesome to your colleagues at the local SHRM chapter, but were designed with HR rather than our manager/clients and employees in mind.

Identity based trust in the model or systems was nowhere to be seen.

I am not going to pretend that designing good compensation systems and performance management systems does not involve some complexity and technical skills, but our job is to de-mystify those models not make them more opaque.

People rarely trust what they don’t understand.

In this day an age of consumerism and social media the accountability to earn and sustain trust rests with management at all levels and platitudes and generic mission and value statements isn’t going to get it done.

The advantages of employee and customer engagement are clear and compelling and two key points-

·        You will never have sustained customer engagement without employee engagement.

·        The foundation of engagement is trust. You have to do the work.

Be clear with management at every level it is their responsibility to earn and sustain trust and give them the tools to do that. They are entirely learnable and reinenforcable.

The alternative is pretty grim from everything ranging to attracting and keeping talent to keeping your customers…

Millennials and Leadership Fails

Millennials, Employee Engagement, and Leadership Fails

It is interesting to watch both the behavior of the Millennial generation and all of the energy and dialogue they are creating.

I think the dialogue is good. Millennials make up 50% of the workforce today and that number will increase to 75% over the next ten years. It is amusing however to see our desire to lump them all together with sweeping statements about who they are and are not.

The last couple of weeks there have been two different situations involving Millennials and leadership opportunities that have played out over social media.

The first was the young woman from Yelp who was frustrated with her living situation and lifestyle opportunities given her economic situation living in the Bay area and not making a lot of money. She chose to use social media to address her concerns in an open letter to the CEO. Didn’t work out well, she lost her job for “policy violations”.

There was a lot of discussion about whether or not she was a victim or overly entitled. That has been debated ad naseum so I won’t cover it here.

I will say that her being hired by Yelp was a management failure. I encourage my clients to build congruency into their hiring process.

Congruency includes things like- the job is consistent with my values, I believe in the product or service, I am willing to do the work to be proficient, I see the activity as being something meaningful and engaging.

When I read her list of concerns I don’t think that was covered in her interview.

I don’t want to confuse anyone by stating I believe in lifetime employment, but even in the tour of duty or gig economy I advise employer and employed to have that congruency discussion.

When you look at what happened and how she handled her issues from the beginning I am going to go out on a limb and say that didn’t happen in her hiring process.

The second story is at the opposite end of the spectrum.

A young woman was hired to work in a retail store. She was so excited and committed to the product and the brand that she posted pictures of her wearing the company’s garments on social media as an encouragement to her network to share her enthusiasm and purchase and wear the clothes as well.

She did that until she received a post on Instagram from the CEO that she didn’t fit the image of the models he wanted representing the brand- essentially she was the wrong body type.

WTF- you tell a committed employee it is okay for you to sell our product, but essentially please don’t wear it or god forbid if you wear it don’t promote it and identify it as our product.

Epic leadership fail. The average employee unless they are working in a very small organization has very few personal interactions with the CEO or any senior manager. How awesome that this interaction is telling an employee they aren’t suitable to represent our brand!

No surprise the young woman has terminated her association with the company. Her story has also been shared over social media.

There are these related concepts called employee engagement and employment brand.

Employee engagement is what Ken Matejka in his book, Why This Horse Won’t Drink, calls being physically, psychologically and emotionally impelled. Employees willing give up other choices to align with your organization. That translates into higher levels of productivity, higher profitability, higher retention and a bunch of other things that CFO’s drool over and human resources professionals wring their hands over trying to create.

It is a good thing. Organizations with high engagement outperform their less engaged counterparts on every key performance metric. The tough part is that it isn’t a survey or a program, it is a culture. You never get done reinforcing it.

That is where employment brand comes in. Employment brand how your employees, alums and potential employees see you and describe you to others. It is very important and it isn’t just about your recruiting brochures and Linked In and Facebook profiles.

Every organization has an employment brand. The smart ones manage their employment brand to ensure they are top of mind with the talent they have and want to acquire.

Engagement starts with that brand. Being able to recruit and manage people who are preconditioned to be supportive of your organization and goals – physically, psychologically, and emotionally impelled so to speak, makes it way easier to manage those folks and get high performance from them. Changing people is really hard, especially since we are so poor at it.

The emerging generations talk with and share perspectives much more than previous generations. Just as executives have old boy’s clubs (and hopefully soon old girl’s clubs) that they tap into to attract and retain candidates these people talk to each other.

Not only do they talk to each other, but they trust each other way more than they trust us. (For more on why read my blogs and articles on the Social Contract.)

So here are my thoughts-

·        Manage whole people, not just their knowledge, skills, and abilities.

·        Hire individuals. Don’t get caught up in group think and treat them all the same whether that is based on gender, age, nationality, sexual preference, or any of the other stupid labels we dream up.

·        Lose the expression human capital from your business vocabulary. If you have to call them something call them people or talent.

·        Don’t expect any more loyalty and commitment than you are willing to provide.

·        Never, never pee on employees who are committed and passionate about your brand and your company. They are incredibly valuable.

·        Do the work to create and sustain employee engagement. It is better, period.

Employers Be Advised!

I have been seeing a few posts of late that reinforce some things that I have known and talked about for some time:
•    We don’t just acquire talent or human capital; we hire and hopefully retain whole people.
•    Contrary to everything you read Millennials are not slackers, uninterested in making a contribution, and generally the most awful generation ever…
•    All Millennials are not motivated by the same things (imagine that)
•    EVERY employer has an employment brand; some have an intentional one…
As a former human resources professional, c level executive, and management consultant I have watched the evolution of how we approach the attraction, retention, and occasionally engagement of staff for over three decades now.
I chose interesting timing (2008) to publish my first book, Managing Whole People, on my personal approach to managing talent. I say interesting because during the recession the concept of treating people respectfully, building engagement into your culture, and appreciating the return on investment of engaged versus unengaged or marginally engaged employees didn’t get a lot of traction.
I think we lost ground we had been gaining in that area for the ten years proceeding. With the unemployment numbers increasing I watched employer after employer fall back into their old habits.
The nice thing about the intervening years is that employee engagement is hardly conceptual. The studies are out, have been vetted, and clearly demonstrate the value of an engaged workforce.
There are still detractors who believe that engagement is voodoo or another fad, but the people who believe that also believe that Human Resources highest and best value is compliance and administration. Many of those detractors live and work in human resources departments. Changing your paradigm is hard…
We aren’t a whole lot better at managing talent than we were thirty five years ago when I entered the corporate world.
The problem is as employers we are facing an emerging workforce that sees themselves as equal stakeholders in the employment relationship.
They have expectations-
•    They expect meaningful work
•    They expect their employer to partner with them in developing their portfolio of skills
•    They interpret loyalty the same way employers do, talk is cheap action is clear
I have to say I continue to be amused when I hear employers who used the recession as leverage to defer pay increases and hiring, reduce workforces, and off shore and outsource whine about how employees just aren’t loyal. Some of them even manage it with a straight face…
Todays’ employees, especially Millennials seem to have embraced some pretty interesting ideas promoted by several of my favorite pundits-
From Malcolm Gladwell they have embraced legitimacy-
Those whom are governed have a voice in the process; their input is sought and heard.
•    There is a dimension of predictability and consistency in the application of the law or standards.
•    The application of the law or standard has to be administered fairly and objectively, you can’t   have disparate treatment without a clear and compelling reason.
From Stephen MR Covey they operate from an advanced interpretation and expectations around trust-
In his hierarchy the first level of trust is deterrence, trust that comes from authority or position. This was a broadly accepted concept for hundreds of years provided first to rulers or religious leaders and embedded in Calvinism that God only allowed “good” people to create wealth and prosper so they were endowed with that trust.
The next level of trust Covey calls competency based. In many cases there is an assumption that anyone who achieves a management role has that competence, but we all know better. In most cases their competency is limited to technical proficiency; their emotional intelligence capacity and social intelligence are rarely considered.
The highest level of trust in Covey’s hierarchy is identity based trust which incorporates both your competency and you character as demonstrated by your applied values and behavior to create credibility.
I personally believe (and Millennials seem to agree) that to a large extent leadership as opposed to management is founded in legitimacy. Leadership is entirely relational versus hierarchical, it was be earned rather than bestowed with a title or position.
This is a new paradigm for us old timers…
The other issue we must face is that the new workforce doesn’t rely on us to validate our employment brand, our work environment and how we treat our employee stakeholders.
Social media has provided them with a platform to research and validate or invalidate everything we say about ourselves.
Here’s a tip, if you think your website and recruiting brochures are your employment brand you are in deep shit.
 If you think you don’t need to proactively manage your employment brand you are deluding yourself.
The competition for talent, especially experienced talent is increasing not decreasing. The Department of Labor estimates that employee turnover costs the U.S. economy over $200 billion annually.
Having a great employment brand is not going to guarantee that people stay forever, but it will help you attract the right people and have former employees promote you as a great place to work.
So two things to remember-
•    Millennials represent the largest  emerging sector of the workforce
•    They see things differently…