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July 30, 2002
Declining Trust Threatens Corporate Competitiveness
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Worker trust and confidence in senior management have fallen over the past two years and, unless reversed, present a major threat to future corporate competitiveness, according to a survey of nearly 13,000 workers.
Watson Wyatt's WorkUSA 2002 survey found that only 39 percent of employees trust senior leaders at U.S. companies. Moreover, there was a five-point drop from 2000 to 2002 in both the percentage of employees who say they have confidence in the job being done by senior management (45 percent) and the percentage of workers who believe their companies conduct business with honesty and integrity (63 percent).
"Falling levels of employee trust are a major threat to future corporate competitiveness," says Ilene Gochman, Ph.D., Watson Wyatt's national practice leader for organization measurement and author of the survey. "Unless Corporate America can resolve the crisis of confidence among its employees, it has little hope of restoring the trust and confidence of investors that is so crucial in these economic times."
Left untouched, low employee trust levels will exact a high financial price, Gochman warns. "Employee trust levels and corporate performance are closely linked. In fact, our survey found that the rate of three-year total returns to shareholders is almost three times higher at companies with high trust levels than at companies with low trust levels," she explains.
To restore employee trust and confidence, companies must focus their efforts in several areas, including assessment, communication and effectively managing business change, according to Watson Wyatt.
"With fewer than half of employees expressing confidence in senior management, no company has been left untouched by the fallout from recent turmoil in the business environment. By assessing just how far trust levels have fallen at their specific organizations, companies can gain insight into the depth of the problem among their workers and establish a baseline against which to measure the success of their efforts to restore trust," Gochman says.
The 2002 survey includes responses from 12,750 workers at all job levels and in all major industries. In addition to worker trust and confidence, the complete WorkUSA 2002 survey - to be released in September - will examine employee attitudes toward decision-making and business strategy, work-related change, communication, HR effectiveness, pay and benefits and performance management.