August 26, 2010

In surveys, growing numbers of workers say trust is on decline

Do you trust your company to treat you fairly?

Do you trust your company to treat you fairly?

While the largest percentage of workers continue to trust their company leaders, more are saying no. Several recent surveys show that employer and employee trust continues to erode under the stress of recession and recovery.

While many workers made sacrifices when the economy crashed in late 2008 and 2009, most companies continue to impose those sacrifices even though profits nationally have snapped back.

Millions of laid-off workers remain out of work; in fact, layoffs continue. And many of the still-employed haven't had salary and 401(k) cuts restored.

Throw in risk-taking, big bonuses and a lack of contrition on Wall Street and you've got the ingredients for worker cynicism, anger and suspicion of managers' motives.

All that mistrust has real consequences: low morale, worse customer service, even labor unrest, say experts. And, while it might not result in a lot of turnover right now, it certainly will when the labor market thaws, they say.

Trust is a key component in the negotiations going on right now in Wichita's aircraft companies.

Do the Hawker Beechcraft and Cessna workers believe company executives when they say they are in trouble and need to slash costs? Or is it an attempt to strong-arm the workers so the company can keep more of the profits?

Mistrust played a key role in derailing a similar request by Agco, the farm machinery maker in Hesston, in March.

Agco executives came to the union seeking to renegotiate their contract a year early in order to cut wages and benefits, and relax work rules.

Union leaders say they understand the company's need to cut costs to compete, but workers got upset at what they said were managers' heavy-handed tactics to steer the vote. The union canceled the vote at the request of its membership.

"I've never seen things so poor around Agco," said Kevin Rimbey, president of the United Steel Workers local in Hesston. "The morale of the people... things are just horrible right now."

How mistrustful

* In a recent survey by global human resources consultant Towers Watson, only 47 percent of respondents said their company's leaders are trustworthy.

* In a Deloitte survey earlier this year, 36 percent of respondents said they trusted their employer's board of directors less than they did a year ago — more than twice the percentage of those who said it improved.

* In a recent Ceridian survey, 24 percent of respondents said their trust in their manager has deteriorated.

* And a survey by market research firm Maritz showed only 34 percent of employees agreed or strongly agreed that they trust senior leaders to look out for their best interests.

The numbers reflect an acceleration in the ongoing decline in worker engagement, said Rick Garlick, senior director of strategic consulting at Maritz.

Companies pushing to get lean and mean to meet heightened competition and shareholder demands have been rewriting the social contract between employer and employee, he said.

Companies have outsourced, shed operations, switched to contract workers, slowed wage increases, eliminated pensions and shed medical insurance.

Employers, generally, are far less interested in providing long-term job security for workers. Instead, they seek a work force that meets their needs at the moment at a cost that's globally competitive.

Couple that with rising executive salaries and practices such as golden parachutes, multimillion dollar executive bonuses and demands for taxpayer-funded incentives and bailouts, and there is some reason for the disenchantment, Garlick said.

"The feeling is 'If you are out for yourself, why wouldn't I be out for myself?' " he said.

Cost of mistrust

Mistrust can be expensive, for the workers, for the company and for the community.

The workers at Hawker Beechcraft are trying desperately to keep the company from moving some of their jobs out of state.

Bob Wood, a spokesman for the Machinists Union, acknowledged there was a lot of mistrust generated by the 2008 strike at Hawker Beechcraft.

"It wasn't a strike that needed to happen," he said. "But we need to put that behind us and look to the future."

The 10-year agreement with Spirit AeroSystems is a model for a way forward, Wood said. It shows the work force is taking the company's needs for stable labor relations into account.

Rich Jiwanlal, Hawker Beechcraft's vice president for human resources, said the company recognizes the toll layoffs and cost cutting take on workers' trust.

"These tough decisions can weaken employees' trust," he said in an e-mailed statement.

"Whether in good times or bad, leaders must have the discipline to invest time and effort in frequent and direct communication. At Hawker Beechcraft, we are striving to do just that."

More broadly, Garlick said, a lack of trust leads to lower worker productivity, a worse customer experience, a black eye for a company's reputation, and, in better times, higher turnover.

"People are most productive when energized around the mission of the company," he said.

Establishing trust must start at the top, said Jim Wolff, a professor at Wichita State University.

Unfortunately, CEOs tend to have a financial background, rather than one steeped in dealing with people, Wolff said.

"The average manager is driven by numbers and not by relationships," he said. "If they're driven by the numbers, they don't necessarily care whether they communicate or not."

But trust can be rebuilt. Rimbey, the union president at Agco, said the company has started talking more to him and their relationship has improved in recent months.

"They can fix the trust issue," he said. "Tell us what's going on and when you tell us something, follow through."

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