trust in leadership

Why Trust in Leadership Matters More Than You Realize

Leaders play an essential role in the smooth running and ultimate success of any organization. They unite employees and motivate them to work toward a shared vision. Leaders engage their co-workers and make sure nobody gets left behind. The right leader can build morale, encourage confidence and initiate action. But a leader can never really be effective and inspiring without an important quality that is regularly taken for granted: trust. As the Harvard Business Review points out, “cultivating a high-trust culture is not a ‘soft’ skill — it’s a hard necessity”. 45 percent of employees state lack of trust in leadership is the biggest issue affecting their work performance.

Trust comprises two thirds of the criteria when deciding Fortune’s “100 Best Companies to Work For”. Research has also shown trust between employees and management is the “primary defining characteristic” of the best workplaces. The role of trust, and how to foster it, is an integral part of any great leadership development program.

Trust can falter when leaders make the decision to withhold important information from their employees. Trust can also suffer when employees believe management is not acting in accordance with the company’s ethos and values. Great leaders are aware of this. They have come to understand the necessity of gaining the trust of their employees and co-workers. But what are the exact, quantifiable benefits?

Recently, a study indicated the many positive effects that result from increased trust in leadership. Specifically, it has been shown that enhanced leadership trust can lead to a significant boost in certain employee behaviors.

Discretionary Effort and Employee Engagement

Generally speaking, discretionary effort is the maximum effort an employee could give if they are motivated to do so. Discretionary effort relates to an employee who goes above and beyond the basic, minimum requirements of their role. It has been pointed out that the only way to encourage discretionary effort is by positive reinforcement. Trust has been named as one of the six most important drivers of discretionary effort.

Of course, there exists a link between employee engagement and discretionary effort, as engaged employees are far more likely to put in extra effort for the benefit of their organization. It has been shown that 70 percent of employees who lack trust or confidence in the abilities of senior leadership are not fully engaged. Conversely, 79 percent of engaged employees state they have trust in their leaders.

Performance and Productivity

For a while, trust has been known to be “the foundational element of high-performing organizations”. In fact, the most trustworthy organizations regularly outperform the Standard & Poor’s 500. And a 2015 study shows companies with high levels of trust are 2.5 times more likely to be high-performing revenue companies than those with low levels of trust. If your organization isn’t achieving its full potential in productivity and performance, it might be time to address pressing trust issues.

Willingness to Endorse the Organization

If you trust your company’s leadership, and believe your managers are doing all they can to ensure a great future for you and your company, you are more likely to endorse it as an employee. You’re more likely to share your favorable opinion of your company, and this helps build the company’s reputation. In turn, this will facilitate future recruitment efforts. Top candidates are always looking for great companies that genuinely care about their employees.

Willingness to Stay with the Organization

A fortunate byproduct of increased trust in leadership is lower employee turnover. When employees have confidence in management and the organization as a whole, they feel more certain of their future at the company. It is also likely they are treated well and valued, so it’s logical to remain with such an organization. This is great news for employers, considering the high costs involved with replacing an employee.

Desire to be a “Good Organizational Citizen”

A good “organizational citizen” involves a person’s voluntary commitment to perform tasks and responsibilities that are not necessarily part of their contracted role. The fact that trust in leadership has been linked to this is great news, particularly for subject matter experts, who generally rely on employees to chip in and help out where they can.

Enhanced trust in leadership results in increased employee engagement. Engaged employees are not only eager to succeed in their role; they also want the company as a whole to flourish. If taking on added responsibilities when they are required will ensure this, engaged employees will be far more enthusiastic to help than disengaged employees.

Trust in leadership should be more frequently discussed in HR and among entrepreneurs. The days of authoritative leadership are done. Employees no longer respond to a “do as I say” philosophy; they want to relate to their leaders. They want regular contact and communication and, most importantly, employees want to believe their leaders will have their backs when it matters most.

 

 

Nick Davis

Nick Davis, Director at Davis Associates, is a business psychology guru with a keen interest in organizational change and culture. Nick has helped clients across the globe achieve greater individual, team and organizational performance.

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