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…