How a Lack of Trust in the Workplace Undermines Employee Engagement and Productivity

Trust is the foundation of any healthy relationship, whether personal or professional. In the workplace, a lack of trust between employees, managers, and the organization as a whole can have detrimental effects on productivity, engagement, and retention. Rebuilding trust requires commitment from leadership and transparency across all levels.

The Importance of Trust in the Workplace

Trust allows team members to feel safe being vulnerable and taking risks. It enables open communication, collaboration, and innovation. Employees who trust their organization and leaders are more engaged, loyal, and committed to shared goals.

On the other hand, a lack of trust breeds secrecy, silos, and self-protection Distrustful employees disengage, withhold information, and avoid risk-taking A SHRM survey found that only 29% of employees say their organization deserves their loyalty. This lack of trust and engagement is costly – disengaged employees are more likely to quit and less productive.

Rebuilding trust is difficult, but essential for a company’s success. As leadership expert Stephen M.R. Covey says, “Speed happens in relationship to trust.” High-trust organizations move faster and more efficiently.

How Distrust Develops in the Workplace

Distrust often starts from the top. Leadership sets the tone, so management’s actions – or lack of actions – greatly impact the culture. Common ways managers break trust include:

• Poor communication and lack of transparency
• Favoritism and unfair treatment
• Micromanaging and spying on employees
• Punishing honest mistakes instead of coaching
• Failure to listen to or act on feedback
• Putting profit above people

These behaviors signal to employees that leadership doesn’t trust them Over time, staff lose motivation and faith in leadership.

However, co-workers also undermine trust. Gossiping, throwing others “under the bus,” withholding information, and refusing to collaborate erode peer trust. Teams cannot function effectively without mutual respect and support.

Finally, organizational factors like excessive hierarchy, complex bureaucracy, and dated policies indicate the company doesn’t trust its workforce. Employees feel constrained instead of empowered

The Fallout of Distrust

The consequences of distrust are severe. A Gallup study found that only 32% of US employees are engaged at work. This massive disengagement stems largely from broken trust.

Disengaged workers are less productive and more likely to quit. One study estimated that distrust leads to a 10% drop in an organization’s productivity.

High turnover is equally detrimental. Replacing an employee costs 20-30% of their salary on average. The hiring process also takes managers away from critical work.

Additionally, distrust breeds negativity and conflicts. Employees vent frustrations through rumors, complaints, or lashing out. Toxic culture leads to nearly 50% higher turnover according to a SHRM study.

In contrast, research shows that organizations with high trust experience 74% less stress. Employees feel energized and empowered when working in a trusting environment.

How Leaders Can Rebuild Trust

Trust starts at the top, so management must model trustworthiness. Leadership’s actions speak louder than words. To cultivate trust, managers should:

• Communicate openly and honestly – Share company information, explain decisions, and be approachable.

• Follow through consistently – Do what you say you’ll do, when you say you’ll do it. Don’t overpromise.

• Assume positive intent – Avoid micromanaging and give staff the benefit of doubt.

• Admit mistakes – Apologize sincerely when errors happen. Don’t punish employees for honest mistakes either.

• Empower and develop people – Provide autonomy, training, and advancement opportunities.

• Champion work-life balance – Support employees’ personal needs and flexible arrangements.

• Solicit input – Ask for feedback often and implement suggestions when possible.

With persistent effort, managers can rebuild report and demonstrate their trustworthiness. But words must align with actions.

Fostering Peer Trust

While leadership sets the overall tone, peer trust is also essential for an engaged, collaborative workforce.

HR professionals play a key role in designing processes and policies to facilitate trust between co-workers. Some best practices include:

• Promote team building – Host activities, events, and offsites for people to connect. Also create cross-departmental teams on projects.

• Cultivate open dialogue – Provide tools for giving peer feedback safely. Set guidelines for respectful, constructive conversations.

• Discourage gossip – Don’t tolerate backstabbing or rumors. Make the ethical standards clear.

• Facilitate cooperation – Tie individual rewards to team performance. Recognize those who help others succeed.

• Offer empathy and support training – Help employees better understand different perspectives and provide emotional support.

With empathy, inclusion, and cooperation reinforced across the organization, peer groups will develop higher trust.

Organizational Factors That Impact Trust

An organization’s structure, processes, and policies also affect trust levels. Bureaucracy and hierarchy imply the company doesn’t trust its staff. Some aspects HR can optimize include:

• Streamline redundant approvals – Multiple sign-offs slow work and disempower employees.

• Relax stringent policies – Loosen attendance, leave, and expense requirements that micromanage staff.

• Flatten the organization – Reduce unnecessary management layers that constrain employees.

• Decentralize decision-making – Empower teams and frontline staff to make choices.

• Communicate transparently – Share information freely instead of limiting access.

• Collect feedback regularly – Seek input at all levels to show the company values employees’ perspectives.

Adjusting these aspects tells staff their employer trusts them. They’ll feel valued and more engaged in return.

Metrics to Track Trust

How can organizations measure something as intangible as trust? While quantitative metrics have limitations, some helpful indicators include:

• Engagement surveys – Look at scores on trust-related items like respect, transparency, and morale.

• Turnover rates – High attrition often signals poor employee experience and mistrust.

• Policy violations – Frequency of offenses like excessive absenteeism can indicate detachment.

• Productivity – Low output can result from disengagement and distrust.

• Grievances – More frequent complaints point to poor relationships and mistrust.

• ethics hotline reports – Increased whistleblowing may reflect eroding trust in leadership.

While these measures require careful interpretation, they provide a starting point to identify gaps and improve trust.

Trust is the glue that binds an organization together and the lubricant that keeps operations running smoothly. Without mutual trust between managers, employees, and the company, engagement, productivity, and retention suffer.

While cultivating trust requires commitment from leaders, the benefits are immense. As management guru Peter Drucker noted, “The fastest way to change an organization is to foster trust and empower people to make local decisions.” By rebuilding trust, companies position themselves for success.