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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…

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The Long and Winding Road

The Leadership Journey

Leadership is not for the faint hearted. It is very much a journey rather than a destination. The other thing about it is that leadership is bestowed on you, it doesn’t come with a declaration on your part or a promotion, or a place on an org chart. It is a gift.

You may be part of what is referred to as your organization’s leadership team, but that doesn’t make you a leader. Leadership is when people agree to follow you and it is a privilege that can be retracted at any point.

I am pretty concerned that right now we are observing leadership failure on an epic level.

I have been a corporate human resources executive, C level executive, and management consultant for over thirty years and I am miserably disappointed with the progress I see to date.

One of my colleagues pointed out in a blog post last week that the old management/leadership model (in the old days we treated them the same) were about planning, directing, controlling, budgeting, and others things we do to people rather than with people.

I saw a post recently that said the new organizational currency is trust. My reaction was that this isn’t new, we just don’t want to acknowledge it.

Stephen MR Covey goes even further to identify three levels of trust-

·        Deterrence, trust coming power or authority

·        Knowledge based, trust coming from perceived competence or credentials

·        Identity based, trust coming from shared experiences and intimacy

Most of our institutions are based on at best the first two levels of trust. The work ethic to a large extent takes its roots from Calvinism. Rich people were inherently good and to be obeyed. Poor people were poor because they weren’t good.

Scientific management, the prevailing management model for generations, picked up right where that left off. This was the concept that manager/leaders thought and workers did. You broke down work into small monotonous pieces that could be mastered and completed without a lot of mental horsepower.

By dumbing the work down, you could also pay a lot less. There are some that would like to return to that model with robotics and automation.

I see a bit of embracing the knowledge based trust model in our infatuation with things like lean, six sigma, and the relentless pursuit of credentialing and certifications in almost every profession.

Everybody wants to be bona fide. It is interesting to me to see the new tendency towards MBA graduates to adding that to their business cards as an implied form of credentialing or competency. I applaud people who have done the work to complete that process, but I have yet to encounter an MBA curriculum that creates leaders.

That identity based trust thing is a real bugaboo! There is not a credential or certification in the world that ensures that. You have to do the work, and that work is hard.

My former profession of Human Resources is taking a real ass whooping these days. You can’t crack open the internet without someone commenting on how obsolete the profession and practices are and why maybe the function should be eliminated.

I hate to admit that to an extent I agree. Many HR practitioners are very skilled in compliance, building lots of rules and infrastructure or making sure that their organization is in compliance with infrastructure imposed by the government because of the way we treated employees in its absence.

Compliance will never optimize organizational performance and lead to identity based trust.

A very well respected colleague of mine posted a great article on 10 things that are bad for your organizational culture. To a large extent I agreed with her.

I do take a couple of exceptions though.

She like a lot of others really have their undies in a wad about employee engagement. They are especially ferocious in indicting organizations who use employee engagement surveys as being a tool for ratting out employees and unnecessary because managers and leaders should know how their employees feel and what their issues are without a survey.

I have two thoughts on that:

·        If you are using your engagement survey to identify malcontents, you have baseline cultural issues way beyond anything your engagement survey can fix.

·        I believe Dunbar’s Number. This is the idea that very few of us can maintain highly personal relationships with more than 150 people at a time.

I know when I was an executive I tried to be very visible and approachable by all the employees in the organization. I know as my scope increased and those organizations got bigger I felt like I got less effective doing that.

I don’t think an engagement survey should be your only or even primary way of sensing where people in your organization are and how they are doing. I also don’t think having a meeting with your employees annually to discuss their performance and how it links to compensation is effective.

That being said I think that engagement surveys can be a tool. I think that while we should abandon the annual performance appraisal process unless it is merely a summary of frequent, periodic discussion about performance we need to give employees feedback.

We also need to explain how we make decisions about their compensation, career growth and a bunch of other things that are really important to them.

Those discussions should be with their manager, not HR. That is how you build identity based trust. That means their manager has to have those skills and be held accountable to do that work.

My colleague doesn’t like employment at will much either. I actually am in support of it to the extent it is practiced the way it was intended.

As it is intended employment at will creates parity in the employment relationship, either party can end for any legal reason. The key is either party. Employers don’t like that part.

It is not a tool to build loyalty, that is a different model. Loyalty goes back to my old friend identity based trust. It is mutual and it is measured in terms of contribution and alignment, not tenure or morale. It is a relationship of equals.

The cold reality is that most organizations exist to meet the expectations of their stakeholders. Providing employment is ancillary. Smart employers realize that recognizing employees as equal stakeholders and appropriately balancing their interests is good for the interests of the entity. I call that employee engagement.

The current state of leadership concerns me. When I look at the current election cycle our choices are pretty underwhelming.

I will be blunt; I am not a Trump fan. He is no leader in business or anywhere else. Anybody that operates from a model of dividedness is not leading. His models are exclusionary and prey on people’s angers sand fears.

I underwhelmed by his competition as well.

I am very disappointed in our Congressional leadership. I don’t agree with everything the President has done, but the blatant obstructionisms of the Republican leadership are hurting the country. Since his reelection the Republican leadership has clearly stated their objective is not to run the country, but to thwart any of his initiatives.

As recently as today announcing they will use their majority to refuse to consider any Supreme Court nominee to honor the right of the people to participate in that process is incredibly poor leadership.

What will be their recourse in the event they lose the general election and the next President to make that appointment is also a Democrat? After all the people will have spoken…….

I am not going to claim that the opposition party hasn’t resorted to similar tactics, but since third grade I was taught that retaliation is not leadership.

Leadership is hard work. It is not for everyone and no one should be ashamed for not seeking it. On the other hand, we are at a time and place where true leaders are in short supply so maybe we need to reexamine our models and figure out where we go from here…

 

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