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December 28, 2013

Paper on Trust and Loyalty in Ethical Work Climate

Trust and Loyalty

Trust plays a very important role in the employees-organization relations. Trust of the employees for their organization leads to the Loyalty for the company.
As discussed above loyalty always comes when a person trusts his organization. To build and increase the trust of its employees, an organization can take several steps. In this chapter we are going to discuss about the trust and loyalty of the employee and about the measures which would be helpful to enhance the Trust and ultimately the loyalty of the employee for his organization. 
Trust and Loyalty:
Trust can be built, among the employee, by including internal communication in the performance management system. Consider a system through which every employee can evaluate the manager and the whole management including manager's evaluation of the owner of the company. The basic purpose of this routine is to check the details of manager's unique strengths and position him based on these strengths.
Maccoby said, “Some years ago, I was asked to direct a program to improve quality of product and working life at a well-known company. Although the need was great, the program never got off the ground, because there was such deep distrust between management and union leadership. Neither trusted that the other would not take advantage of a partnership, and the union leaders did not trust each other” (Maccoby, 1997, Pp. 56-57)
In a very profitable Auto company "Saturn" the trust between the employees and the administration is at its peak and thus the employees of that company are much more productive, satisfied and quality conscious. If union understands the business logic it can more efficiently represent the employees while managers have learned to respect the values of democracy by helping and cooperating the union leaders. (Maccoby,1997).
Building employee Trust:
In the present scenario, after considering what employer and what employees want, the success of any business depend much upon the loyalty and trust of their employees. The ability to trust is the basic difference between a bureaucrat and an entrepreneur. They both are different in a way that entrepreneur trust his associates and risk failure also, while the bureaucrat minimize risk. The relationship between companies are established and connected by means of trust not just by the contact. 
To whom and how we trust anybody based upon the national Culture but even within or across national Culture it depends upon to whom we consider trustworthy and how well we trust the people.
It can be easily said that the prosperity of any nation depends upon the values, which support trusting relationship. Francis Fukuyama's in his book Trust says that "The degree to which people value work over leisure, their respect for education, attitudes toward the family, and the degree of trust they show toward their fellows all have a direct impact on economic life and yet cannot be adequately explained in terms of the economist's basic model of man... For example, certain societies can save substantially on transaction costs because economic agents trust one another in their interactions and therefore can be more efficient than low trust societies, which require detailed contracts and enforcement mechanisms," (Fukuyama, Pp. 351-2).
It is often noted that where trust is low, corruption affects the efficiency of the employee. In such cultures Leaders rule by fear, and there is huge differences between the wealth and standard of living of the people. It is noticed that working through misunderstanding will either strengthens trust or dissolves it completely.
As trust disappears between the management and the employees, employees put their interests ahead of company's interests. The employees believe that they can only trust themselves, their competence, their ability to learn and their ability to produce better results. They believe to give their value not their loyalty to the company.
How to increase Trust:
     If a company want to increase trust among their employees and customers, it must have to follow the following points.
·         Define the ethical position of the company. Provide a written pelage to the customers and employees. Define the values, and define what is right and what is wrong, what is fair and what is good. Assure the customers and employees that all the employees at any level will treat each other and the customers accordingly.
·         Train the employees to translate the ethical values, which is in the pledge into specific actions that will support the pledge and build trust.
·         Provide full support and the required guidance to the employees. Share the views with employees about how the pelage applies in particular cases within the organization.
·         Measure the success of the organization. Simple system to measure the effectiveness of ethical initiative must be implemented.
·         Those employees who choose to work with the promises of the organization must be rewarded and those who do not follow must be removed.
The best way to build trust in employees-organization relations in the work place is to work together. Excessive wages, company picnics and great working conditions cannot build trust. The following three points are important for building trust among the employees of the company.
·                     The owner or manager is fair and honest and trust the employees of the organization regarding the daily working of the company
·                     The owner or manager is fair about personal policies.
·                     The owner or manager spends great deal of his time on good communication with his employees.
The employees trust can be achieved by "fairness". The Success of the employee means that the employee can maintain a reasonable standard of living and have the confidence that his job is safe. The hottest "fairness" issue in today’s business world is pay and job security.
The distribution of rewards depicts that what is highly valued by the organization. If the employees are being continuously rewarded and recognized, for example, for building customer loyalty, then building the customer loyalty become their highest priority and not just a routine work of the organization.
"Management trust" is just as important as important as pay, job security and rewards. Earning the employee's trust means that the management must trust the employees. It is important that management must learn a lesson of mutual trust. This means that management must value its promises, no double standards etc. It is very hard for an employee to care for customers if he does not believe that the company cares for him.
The customer's trust can also be achieved through "fairness". It is almost impossible to create customer's satisfaction without efficient, effective system and competitive and reasonable cost and price structure. All the transactions with customers must be completed on time and to satisfy all the concerned persons. The processes must be well conceived and well executed. Customers trust those organizations where their expectations met. So well execution of a transaction is not enough. Any organization’s ability to meet these new and higher expectations distinguishes it from its competitors.
The management's responsibility is to accept that shift of focus and give a free hand to the employee to do whatever he need to build that long term relationship with the client and always serve the client beyond his expectations.
Trust leads to loyalty and this ethical dealing with the client’s leads to their trust.
Whenever Secrecy is applied into the organization, it increases suspicion and misinterpretation of different action has started. Actually the overall quality and standard of business increases when the employees of the company feel and care as much about the company as the owner do. It is noticed that the employees of small businesses often overestimated the profits of the company. The studies indicate when the true financial position is shared with the employees; the employees themselves voluntarily initiate cost controls.
If there is any doubt what amount of information should be shared among the employees, experience indicates that too much information is much better then not enough information. Experience also tells that never lie to the employees about human relation issues. Employees of the same organization always communicate with each other and so any contradiction can easily be detected and brought to the surface to the embarrassment of the management. To avoid this dilemma a company has to follow the following points.
·         Take time to talk with their employees
·         Try to find out what they are thinking
·         Tell them whenever its possible whatever they want to know
·         Tell them the whole story, not only the good points
Allow the employees to present their views, suggestion and opinions on different matters to the management. 
The responsibility of the Human resource department is to try at their utmost to get the loyalties of their able and efficient employees. Following are some of the tactics of the organization for retaining their employees and ultimately increase their trust and loyalty for the organization:
·         Meet with the employees monthly or more often to address and understand their concerns and reinforce exceptional performance
·         Review job expectations and career development opportunities continuously with the employees. It is a good practice to ask the employees what they need to stay with the company and try to accommodate them
·         Develop a system to measure the employee satisfaction on regular basis
·         Conduct random and planned interviews with the employees to figure out how they feel about their immediate bosses
·         Use training to address weaknesses in managers styles identified through surveys and interviews
·         Align and tie manager’s compensation to retention rates
·         Create and develop a program to identify bad management
Transfer poor managers from their managerial jobs
The key to healthy work relation among the organization is based on managing communication within the firm. Communication is a two way process. It is really difficult for an employee to work with all of its competence, intelligence and enthusiasm if he does not know the real purpose of the job he is going to perform, the more important point is to give opportunity to the employee to communicate and contribute the idea and opinion before the manager or owner makes a decision.
Communication is actually the process of trusting the people and tells them with all the honesty about their position, about the position of the business and about the future plans of the organization. Negative feedback is maybe necessary sometimes but positive feedback should be the basic tool to establish a good human relationship between the employees and the management. It is to be noted that the employees are human beings, its not easy to make them fool and they can easily detect insincerity in the atmosphere. Similarly they also respond to the honest and serious efforts to treat them as mature and responsible human beings. Some techniques that can stimulate the two-way communication between the management and the employees are:
·         Bulletin Boards
·         Suggestion Boxes
·         Newsletter
·         Open Meetings 
The role of internal communication is to promote increase organizational reflexivity and involvement in organizational development. Integrated communication is the application of analysis; communication and evaluation techniques to create and manage integrated business process design, feedback and system to improve human interaction and human performance in an organization in order to achieve the desired goals of the organization.
To implement the system of internal communication in the organization the following points has to be followed.
·                     Often converse with everyone more informally
·                     Survey Employees about Workplace Culture
·                     Develop a more robust performance management system
To build trust through communication one basic point is to converse regularly with the employees and mangers. Ask them about their thoughts, their opinions and suggestions about the recent company's initiatives or business decisions. Try to be genuine and make these conversations a daily routine and part of the organization's culture. If it depicts through the communication that there is a lack of motivation, communication or a leadership in the management it can be shown through the response achieved. Whole of the management has to make it sure that the informal conversation must be the daily routine of the company.
Suppose the motivation, communication and leadership is the key factors of an organization than there is nothing wrong if these factors can be measured. Conducting a cultural or an organizational survey to measure the basic level of leadership, motivation and communication or any other attributes, has really helped the management of the organization. Surveying the employees about the workplace culture is helpful to identify the strong and weak points of the organization. Try to conduct such survey every month, or every six months or every year to find out the improvements and changes and use this survey to set the priorities based on the business objectives. The survey results can even become the part of manager's annual report.


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