Where has all the trust gone? - CIPD

sustainable organisation performance

stewardship,

Resleeaaderrcshhip report aMnd agorvcehrna2nc0e 12

future-fit organisations

building

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capability

Where has all the trust gone?

stewardship, leadership and governance

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sustainable organisation performance

Contents

stewardship, leadership

and governance

future-fit organisations

Acknowledgements

2

Foreword and preface

3

Executive summary ? key highlights

5

1 What's known about trust?

10

The challenge of trust in today's society

10

What is tbruusitldainbogut and why does it matter?

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x1x1x

HR capability

Why trust and not engagement?

13

Building or repairing trust

14

The role of leaders

15

The contribution of HRM practices and processes

17

The role of the HR function

17

Data collection

18

Quantitative data

18

Qualitative case studies

18

2 New insights into organisational trust

21

Types of trust relationship

21

3 HRM and the repair of trust

36

Journeys through the valley of distrust

36

HRM actions that maintain or repair trust

37

Appendices

53

Appendix 1: The case studies

53

Appendix 2: CIPD Employee Outlook survey results

86

Appendix 3: Additional information about data collection and analysis

89

Appendix 4: Learning from other reconciliation activities

91

References

92

`Trust is important in the good times but also in the bad because life goes in peaks and troughs and there's going to be a point when you're going to require that trust and if you've lost it before, how do you go about demonstrating that actually you are not going to repeat history?' John Lewis

1 Where has all the trust gone?

sustainable organisation performance

Acknowledgements stewardship,

future-fit

This report was written by ProfessloeraVdeerorsnhicipa Hope-Hailey, Dr Ros Searleoargndanisations Dr Graham Dietz, with helpanfrdomgoDvreSruneaAnbcbeotson, Vanessa Robinson, Claire

McCartney and Ben Wright.

The research team were:

Director ? Professor Veronica Hope-Hailey, Cass Business School

Dr Sue Abbotson, Cass Business School

Catrin Ballinger, CIPD

Dr Graham Dietz, University of Durham

Professor John Hbaiuleiyld, Cinagss Business School

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xxx

Nicola JacksHoRn,cCaapsasbBiulistiyness School

Claire McCartney, CIPD

Dr Maria Nikolou, Cass Business School

Vanessa Robinson, CIPD

Dr Ros Searle, Open University

Ben Wright, City University

Millie Kilic, University of Durham

We would very much like to acknowledge Dr Sue Abbotson's creative input into the project, particularly in the early stages of the develpment of the `trust typology'.

Organisational acknowledgements

We would like to thank the 14 organisations who gave us access to their people and to those people for taking the time to speak so openly about this important but personal issue:

GKN Norton Rose Ernst & Young Cable & Wireless The John Lewis Partnership Department for Business, Innovation and Skills Her Majesty's Revenue & Customs The Day Lewis Pharmacy Group BANKGROUP Bank, UK The Royal Mail Norfolk County Council Hampshire County Council Sunderland City Council Orvis Retailers

2 Where has all the trust gone?

sustainable organisation performance

Foreword and preface stewardship,

future-fit

leadership

organisations

and governance

In times of uncertainty, trust becomes more important. The Edelman Trust Barometer in January 2012 reported

some depressing results: the global financial crisis and the demise of high-profile banks, and the government

rescue plans that followed, have profoundly destabilised public confidence, resulting in a breakdown in trust

in government and business.

The UK public's cynicism has been stoked by the MPs' expenses scandal, high-profile organisational failures

(such as the BP disaster in the US), the unveiling of News International's phone-hacking practices, the 2011

summer riots and the ongoing eurozone crisis. Cuts to national and local public services have been reported

alongside a decision

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Does it really matter for society whether trust is up or down like the weather? The answer is yes, trust does matter. We rely on certain levels of trust to function and prosper. Trust is critical for building the foundations of social order; it is the basis for civil society. What of the workplace ? what's happening there? Is trusting your colleagues essential, or simply a `nice to have'? These are relevant questions for HR practitioners.

In the workplace, one distinct advantage of trust is its link to innovation. Some economic commentators argue that for UK plc to return to growth and restore job opportunities, innovative approaches will be key. No one is going to take a risk unless they know that they will be backed and trusted by their immediate and senior managers. For small- to medium-sized enterprises, innovation will fuel growth, and that has to be good for our economy. In the public sector, managers will have to rethink the way they deliver services ? we need people to spend time reinventing forms of delivery, not simply hacking away at the size or volume of existing practices.

Another distinct benefit is that `high trust' workplaces find it much easier to embrace organisational change ? they can adapt faster and will achieve better levels of employee engagement at all levels. At times of high uncertainty, having a boss or CEO that they really trust can encourage employees to take the plunge and try something different. Furthermore, we know that trust encourages successful co-operation and teamwork, less labour turnover, promotes and facilitates partnerships and joint ventures and decreases operating and transaction costs (managers can spend less time monitoring staff). It also has important benefits for promoting employee well-being and motivation.

So, understanding how to maintain and not lose trust in the first place becomes a key management contributor to better business performance. There is an old Dutch saying: `Trust comes on foot, but leaves on horseback.' It's far better to keep the trust of your workforce than risk throwing it away. However, if a breach of trust does occur, how can organisations mend and repair these trust levels. How can you restore the faith of a workforce after downsizing and restructuring? These questions should be the heartland of HR practice and so we at the CIPD felt it right to commission a team to conduct research into trust repair.

We were surprised and delighted by the number of organisations who volunteered to take part in the project. Sadly we had to turn some away because the logistics were not possible, but we collaborated with 14 leading-edge employers such as the John Lewis Partnership, major government departments such as BIS and HMRC and smaller but rising stars such as the Day Lewis Pharmacy Group. We also draw on results from the CIPD Employee Outlook survey.

3 Where has all the trust gone?

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