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How Downsizing Damages Trust

Written by: Dianne Crampton

Article Overview: How you handle downsizing either reinforces corporate congruency or breaks it along with perceived integrity, reliability and fairness, which in turn damages trust. This article offers two suggestions on how to repair workforce trust and explains the productivity cost of not doing so.

How Downsizing Damages Trust

I remember how I felt the day I climbed onto the ledge six feet above the concrete pavement and looked down at my colleagues. We were enrolled at a Project Adventure facilitator's boot camp and I was getting ready to turn away from the group, cross my arms over my chest and free fall backward into their arms. Trust was an issue.

I was surrendering my safety, well being and control over to someone else. I had to trust that their sense of duty and responsibility for my safety was real. That elusive feeling of trust that develops gradually within a group can be easily diminished or lost by inattentiveness.

I tilted back on my heels and fell.

It took all my self control not to flail my arms out to catch myself and inadvertently break someone's nose as adrenaline and blood surged through my body.

The risk was real.

The feeling of free fall and faith that someone is prepared to catch you is also common among survivors of corporate reduction. Do they trust that the company is reliable, has integrity, is fair, cares about their well being and is competently prepared to catch stressed and concerned employees? Do they think the company cares?

According to Roberta Matusun's recentOp Ed in New England Journal of Technology, how an organization downsizes effects employee morale and commitment. She gives examples of both good and poor workforce reduction procedures.

Trust is the belief and confidence in the integrity, reliability and fairness of a person or organization. It is history dependent because what is said and what is done must be congruent over time. And, it is easier and less expensive to build trust then it is to rebuild it.

Workforce reduction and the way it is handled either reinforce congruency or breaks it along with perceived integrity, reliability and fairness. When this happens, trust is compromised.

According to Abraham Maslow, trust is an essential human need, and as such is required for a person to grow cognitively to fulfill their potential. This potential slows during prolonged periods of stress and uncertainty. For one reason, employees are defensive rather than open and creative when trust is compromised. This leads to reduced workforce productivity and the following behaviors:

• Suspicion
• Guardedness
• Taking on more than they can handle resulting in poor internal and external customer service
• Working more slowly
• Missing important details
• Not freely helping others for fear of being replaced
• Closed and silent when their input is requested for problem solving
• Non genuine
• Looking elsewhere for opportunity

Likewise when stress and uncertainty is present the employee's nervous system automatically responds as though they are in danger. It sends signals through the body to prepare the employee to run away or stop and fight. Therefore, even well meaning and loyal employees suffer when uncertainty is present.

First, the fight or flight response releases hormones, which become harmful if not used that reduce the employee's ability to perform complex problem solving, creative functions, and activities that require memory. This is why a fearful and stressed workforce tends to score lower in problem solving, creativity and the ability to learn new skills than an enthusiastic workforce with multiple opportunities to learn and grow without fear of repercussion.

Second, these same fight or flight hormones compromise a healthy immune system. This is why many highly stressed people tend to come down with more colds and flue than less stressed colleagues.

For this reason, Toyota, the world's No. 1 automaker, is resisting job cuts for its 1,900 workers in San Antonio, offering reduced workweeks instead of pink slips.

And, as Toyota faces its first corporate loss in its 70-year history, the automaker is offering buyouts to 18,000 U.S. workers in an attempt to thin its factory workforce voluntarily. The manufacturer also hires temporary workers to meet fluctuating market demands and these employees know up front that they would be let go first before full time employees. Executives at Toyota believe that losing employee trust is far too costly to pursue short term decisions that impact long term productivity.

Trust because of its impact on workforce productivity is too valuable an asset to be taken for granted. It's very difficult to negotiate organizational change or do collaborative work without it.

The first step is to listen to employees. Leaders who are perceived to be untrustworthy, callus or deficient in the ability to empathize perform poorly in this step. Leaders with good questioning and listening skills and who are in touch with their feelings and, therefore, emotionally intelligent tend to do well.

Until an employee believes his point of view and feelings are understood, it is difficult to move on.

The second step is to be transparent, truthful and honest about the health of the company going forward. Employees who discover that managers were given excessive bonuses when good workers were let go, find it difficult to repair trust. When they leave, they often take corporate secrets with them.

Conversely, employees who know how the work they perform impacts company goals and improves the bottom line tend to perform better. Especially when they know everyone is in the same financial boat.

The employee must ultimately believe that the company has integrity, is reliable and fair in order to renew trust. And, the company must understand that excellent employees do not function well when broken trust leads to harmful stress.

Therefore, companies can help repair trust by taking measures to help employees manage stress and let go of disappointments effectively.

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Article Tags: congruency, damages, employee morale, fairness, integrity, productivity, reliability, risk, workforce, workforce reduction



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