As business leaders pick up the post-recession pieces, I’m increasingly asked how companies can restore “trust” with employees. My answer: only by instituting new talent management approaches that reflect the reality of today’s relationship between employees and the corporation.
Until roughly fifty years ago, there was a tacit understanding between employees and corporations: If employees worked hard and demonstrated loyalty to the company, the company would reward them with a steady career and comfortable retirement. This equation had been at the heart of the relationship between individuals and organizations throughout centuries of Western economic tradition.
One side of the equation began to erode in the 1970’s as companies chipped away at the security and guaranteed payments they offered. Decades of lay-offs, downsizing, and reduced benefits later, we all know that loyalty and hard work will not guarantee a job for life nor a comfortable retirement.
However, despite the obvious erosion, many of our talent management practices and behaviors are still predicated on this tacit agreement. It is the disconnect between the philosophy reflected in our formal policies and the reality of our personnel actions, between what we say and what we do, that lies at the heart of employees’ sense of unease. Bottom line: the organization should not implicitly promise protection and care that it realistically can’t and won’t provide it.
The implicit promise is still conveyed today through talent management practices that tie employee interests to long-term service: pensions, tenure-based perquisites of any type (amount of vacation, for example), training and development investments that are focused primarily on youthful new hires (with the expectation that they will pay-off over a long period of time), and internal promotional ladders based on tenure. These vestiges of organizations’ former commitment to long-term protection and care aren’t consistent with today’s reality. They just don’t make sense.
Many times managers feel compelled to convey messages about organizational stability (“no more lay-offs”) that the listeners – and probably the speakers themselves – don’t believe. These well-intentioned managers are trying to restore the old equation – but, in reality, are further decreasing trust by amplifying a tone of unreality.
And, while companies no longer promise long-term protection and care, leaders have been slower to acknowledge that this lessens the employees’ obligation for loyalty. Many still expect an expression of unwavering loyalty. The practice of immediate dismissal upon acceptance (or, in some cases, exploration) of another job is still common in many firms.
The mismatch between what we all intuitively know and our talent management practices and leadership messages are at the heart of the lack of trust. Restoring trust requires establishing a new, realistic relationship – one both sides believe – translated into talent management practices and leadership behaviors that reflect that new equation. Trust only breaks if you promise something you can’t or don’t deliver.
I believe the new equation will be an adult-to-adult relationship between organizations and those who perform work. Organizations should expect that everyone who shows up to work will be fully present, engaged, and have the relevant skills to do the job at hand. Individuals should expect the opportunity to choose interesting, challenging work, suited to their skill set, and to be compensated through fair, transparent arrangements.
Talent management practices that provide individuals with more choice in their work arrangements will be central to this shift. Already progressive companies are beginning to focus on measuring results, while leaving the choice of when and where to perform the work to the individual. They may specify the desired outcomes and principles under which the work should be performed, while leaving the exact approach to the discretion of the individual. Others are breaking work into projects and giving employees options about the type or intensity of project they’d like to take on next. Some are creating menu-based work arrangements.
Technology is making it easier and less expensive to find the individuals with skills or knowledge well-suited to the specific task at hand. The value of longevity will decrease as matching the right person with the right task will be made much simpler.
This shift will be a win-win in more ways than one. Openly reflecting the reality of today’s employee-employer relationship – telling it like it is – is what’s needed to restore trust.
But, beyond that, I believe the new relationship is more appropriate for the levels of collaboration and innovation required today. Employee loyalty, whether to the organization overall or to the individual boss, can lead to conformity and dependence, rather than a sense of exploration and innovation. It can foster protectionist competition, rather than a willingness to share ideas broadly.
And the new relationship fits better with the expectations of younger employees. Gen Y doesn’t pretend to be loyal. They don’t expect one company to provide long-term care. The equation they care about is one that gets them excited in the immediate task.
Finally, we can’t overlook changing the metrics of success. The assumption that longevity is important has caused organizations to optimize around lower transaction costs (hiring, firing) rather than finding the person with the best possible skill for the specific task at hand. New measures, along with new talent management practices, will create trust in a new relationship to stand the test of this century.
Tamara J. Erickson is a McKinsey Award-winning author and widely-respected expert on collaboration and innovation, on the changing workforce, and on the nature of work in intelligent organizations.
She has twice been named one of the 50 most influential living management thinkers in the world by Thinkers50, the global ranking of business thinkers created by Des Dearlove and Stuart Crainer.
She has written a trilogy of books on how individuals in specific generations can excel in today’s workplace: Retire Retirement, What’s Next, Gen X? and Plugged In, and is working on a fourth book for the generation under 17 today.
Tammy has authored or co-authored numerous Harvard Business Review articles and the book Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent.
Erickson holds a BA degree in Biological Sciences from the University of Chicago and an MBA from the Harvard Graduate School of Business Administration and has served on the Board of Directors of two Fortune 500 corporations.
Tammy is the Founder and CEO of Tammy Erickson Associates, a firm dedicated to helping clients build intelligent organizations.
This post was first published on the HBR Blog Network.