From the TUC

A Lack of Trust in Senior Management

10 Aug 2009, By

A survey released today by the Chartered Institute of Personnel and Development (CIPD) highlights a lack of trust in senior management.

The damaging impact of redundancies on staff morale, combined with a fundamental lack of trust in senior management, threaten to undermine the performance of companies just as they are preparing to capitalise on early signs of economic recovery. These are the findings of a survey of 3,000 employees for the Chartered Institute of Personnel and Development.

The survey, conducted by YouGov, finds that seven out of ten (70%) employees report that redundancies have damaged their morale, with more than a fifth (22%) of employees so unhappy as a result of how redundancies are being handled that they are looking to change jobs as soon as the labour market improves. A quarter (27%) say they are less motivated as a result of the redundancies, while more than half (51%) feel under greater pressure to perform and prove their worth as a result of the job cuts.

Against this background it is not surprising that the vast majority of employees (81%) believe that senior managers need to restore or improve trust in their leadership, with just a quarter of employees agreeing that they are consulted on important decisions. Employees believe that frequent and honest communications (53%), more meaningful consultation (35%) and giving employees greater voice in the workplace (30%) would have the greatest impact on improving trust.

The survey also reflects public outrage over “rewards for failure”. Almost a third (29%) cite not rewarding failing senior managers as key to rebuilding trust, while just over a quarter (27%) of employees believe that senior leadership teams must show they trust their middle and junior managers to make decisions if they are to rebuild the trust felt in them.

Ben Willmott, Senior Public Policy Adviser, CIPD, says:
“The impact of redundancies on the dole queue is well documented. But there could be a nasty hangover for employers too. Survivors of redundancy programmes left ‘punch drunk’ by the process may not have the levels of motivation and commitment needed for their employers to capitalise on any recovery. Many disillusioned employees will vote with their feet and leave as soon as the labour market picks up.

“Our research highlights a fundamental lack of trust in senior management among many employees, largely due to the lack of meaningful consultation and effective communication during major change such as redundancy programmes and restructuring. If employers communicate clearly to staff over the challenges facing the business and involve them in the process of change management through effective consultation, employees are much more likely to understand the need for change and to remain motivated and committed to the organisation.

“The survey also highlights the dissatisfaction people feel with the rewarding of failing senior executives. Failing chief executives and directors should not be financially rewarded when they leave organisations when their leadership has contributed to poor business performance. ‘Rewards for failure’ are contributing to a deep-seated sense of unfairness amongst employees who feel they’ve been less well treated. This needs to be addressed if trust in senior leadership teams is to be rebuilt.”

The case for unions could not be stronger than in the current climate.