Trust by employees continues to be a significant problem in organizations with 57% of employees not trusting their leaders. Indeed, one study found that the lack of trust in an organization by and between employees is the most important and extensively studied barrier that prevents knowledge sharing. Therefore, if an organization wants to encourage their employees to engage in knowledge sharing, the organization must foster an environment of trust. A significant problem that employees face is that they lack the confidence in the organization that their contributions will not jeopardize their position in the organization or place them at a disadvantage compared to their peers.
“The organization cannot trust the individual; the individual must trust the organization” – Ray Krock
ENVIRONMENT OF TRUST
The questions organizations will ask themselves are: How do we foster an environment of trust? Where do we start? These are all great questions! Fostering an environment of trust not only engages employees to share knowledge, but also creates a positive atmosphere. An organization that is seeking to foster an environment of trust is an organization that cares about the well-being of their employees. The first step is to understand what organizational trust means. We can define trust using Mayer, Davis and Schoorman definition as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trust, irrespective of the ability to monitor or control that other party” (p. 712). In other words, employees who place trust in an organization do so by placing themselves in a vulnerable position with the expectation that the other party will treat that trust with the utmost care. For example, an employee who brings a case of mismanagement of funds to their supervisor’s attention expects that the supervisor will treat this concern seriously and not use it to impact the employee’s position within the organization negatively. Thus, we can say that trust is a perceived risk. When an organization looks to understand how to create an environment that is conducive to knowledge sharing, the organization must review its structure, starting at the individual level and moving up through the organizational structure.
The first step in building trust is recognizing that employee trust must first be earned; however, there are several ways that an organization can build trust, such as:
- Keeping all employees informed through open and transparent communication (remember to talk to them, not at them);
- Acting with integrity and keeping commitments (e.g., psychological contracts);
- Addressing the hard issues within a reasonable amount of time (“the elephant in the room”);
- Treating all employees with respect and dignity;
- Respecting their position and responsibility in the organization. Never downplay their role by questioning them in front of their subordinates;
- Listening to employees’ issues, feedback and suggestions.
IMPACT ON EMPLOYEES
Trust can be lost faster than it is earned. Trust will not happen overnight, but once the organization has created an environment of trust, it must continue to promote this positive environment. One way that an organization can measure trust is to look at how often employees are engaging in knowledge sharing. Knowledge sharing is a great indicator of trust between employees and their organization. Employees that perceive that their organization is supportive by fostering an environment of trust, has a positive effect on the employee’s willingness to engage in knowledge sharing. Not only will employees be more open to sharing information, but when they see others doing so, they will feel obligated to reciprocate by adopting a more positive attitude towards other employees. On the other hand, when employees do not perceive that there is organizational trust, they are more hesitant on sharing information. As a result, this can lead to a breakdown in communication, loss of institutional knowledge (especially tacit knowledge, as discussed in a previous post), potential financial impact and loss of competitive advantage, hostility between employees, and of course high employee turnover. Employee turnover can cost an organization the equivalent of the employee’s 6 to 9 months’ salary on average. Coupled with the other potential losses (such revenue or institutional knowledge), this can be significant for any organization, especially smaller organizations.
LEADERSHIP ON TRUST
Not surprising, leadership plays a significant role in developing and maintaining an environment of trust. The right style of leadership can be leveraged to increase trust and ultimately increase knowledge sharing. The right style of leadership can create an environment of trust by using charisma, encouraging conversations between employees and giving individual acknowledgment that leads to improved employee morale. Therefore, while trust is the new core of leadership, trust should be ingrained within the organization and promoted as a critical element of the foundation of the organization. Trust, along with monetary awards and employee interactions is a great way to encourage knowledge sharing between employees.