How Trusting and Respecting Employees Helps to Boost Performance of the Organisation - Literature review Example

How Trusting and Respecting Employees helps to boost performance of the organisation Introduction If business organization wants to earn the trust of its customers and gullible public, then, they should first create a culture of trust well within their own organization. Trust and respect have many advantages from an intra-organizational outlook, which results in the reduction of transaction costs for the business. Trust and respect will have a direct impact on the business intra-organizational outcomes and demographic diversity. As per Connell, Ferres, & Travaglione (2003), trust is acknowledged as a significant factor inducing both success of the businesses in the marketplace and also nurtures the welfare of the employees (Voelpel & Kearney 2012:1) This research essay makes an earnest attempt to find how trust and respect shown to employees helps to improve the overall performance of the company with particular reference to supply chain management companies. Trusting the Employees and Organisational Success As per Rotter (1967), trust is nothing but expectancy shown by a group or an individual that the promise, word, written or verbal statement of another group or individual that can be banked upon. As per Mishra (1996), trust involves the readiness of a trusting individual to feel vulnerable to another. As per Colquitt, Scott, and LePine (2007), the trust is an inclination to acknowledge vulnerability to a trustee footed upon the anticipation that the trustee will not abuse this vulnerability. Thus, trust propensity includes the dispositional readiness to bank upon others whereas trustworthiness mirrors the capability, generosity, and integrity of a trustee. As per Dirks (1999) , there is plenty of corroboration available in the past empirical studies that trust among the members of the organizational unit nourish that unit’s performance, chiefly, by improving motivation and directing the members of the unit initiatives’ towards attaining the established aims (Voelpel & Kearney 2012:8). Trust is normally swayed by: Awareness or familiarity of the persons in the relationship over a considerable duration of time; Apportioned objectives and experiences; Mutual dissemination between individuals over a period of time; Manifestation of non-exploitation articulated over a period of time; As per Fox, trust is also concerned with the magnitude of regulation in the business. As per Ackroyd & Thompson, there can be business organisations, which have either low or high trust regimes. Low trust regimes are branded by general suspicion and mistrust of employees and are frequently associated to the need for ongoing surveillance over many features of employees’ demeanour. Such regimes are also always related with high magnitude of surveillance and regulations for the individuals (Dani et al 2006:952). The culture of an organization can assist to explain the acceptable magnitude of personal relationships within the organisation. An organisational culture footed upon cohesive associations, respect and trust, which nurtures bonding among individuals. Successful managers work hard to develop a relationship footed upon trust with associates, customers, and employees. Top managers who have established trusting relationship with the employees can relax or in some cases forbid some of the impediment connected with fastly changing work atmosphere. Even when the change is not totally encompassed by all employees, employees will still trust and will follow a leader who has spent considerable time in establishing a relationship with them and is considered as being approachable, honest, and reliable. Generally, trusting relationships motivate and usher out the best in people. Thus, motivation backed by trust can nourish innovative creativity and thinking that results in an enhanced organizational attainment and enhanced productivity. The capability of a leader to lead an organisation and to establish a relationship that leads to trust is vital to move the organisation forward positively. Some managers are of the view that trust and respect will happen from the nature of their leadership position. A leader can have a trusting relationship with his employees in the following manner: Whenever communicating, he should separate facts from feelings To establish an atmosphere or environment where the leader can share and trust openly without being feared or afraid. By indicating reverence To take note overtly and dynamically To address the differences promptly (Alston 2013:92). Davis and Landa (1999) exposed that about 68% of the employees do not have any trust on their managers and 43% of the employees think that their managers are always used to lie and cheat (Voelpel & Kearney 2012:2). As per Colquitt, Scott, and LePine (2007), trustworthiness consists of compassion, capability, and honesty. While the above traits are usually accredited to individuals, they could also be observed with regard to an organisational culture. For instance, an organisation can be contemplated as proficient, and its culture can be benevolent with regard to employees’ needs. Visions, customised procedures, leadership styles, and the pervading atmosphere of interpersonal relations can be an indicator of an organisation’s low or high integrity. Thus, a business organisation as a whole together with its constituent subunits can be branded by certain magnitude of benevolence, competence, and integrity respectively (Voelpel & Kearney 2012:2). As per Simon and Peterson (1999), the positive association between relationship conflicts and task is higher when trust is low and feebler when trust is high. Thus, high magnitude of trust appears to facilitate a restricted departure of the task from relationship conflicts. Trust is a prerequisite for overcoming the non-adaptive social categorisation impacts that frequently destabilise diverse teams in an organisation (Voelpel & Kearney 2012:9). As per Simons, Friedman, Liu & Parks (2007), as per research study carried over in USA, black employees often rank their managers as demonstrating lower magnitude of behavioural integrity than did non-Black employees. As per Heffner, Salas & Cannon-Bowers (2000), if there exists high inconsistency within an organizational unit as regards to magnitude of trust in and credentials with their organisation, this may result in obscure cooperation and communication in a number of ways. While functioning as teams, for instance, those with high magnitude of trust might freely and openly exchange their information with all other remaining team members and might anticipate, or at some point of time, even demand that others do the same. The high trust individuals might change their demeanour accordingly and will become less committed and helpful, if these anticipations and demand are not met with. Absence of trust or lesser trust might stop them from boosting their active memory and from acquiring shared mental models where both of which have been demonstrated to be significant factors of high magnitude of unit performance (Voelpel & Kearney 2012:12). As per Kotter and Heskett (1992), majority of the HPs corporate success is correlated to its corporate culture, which is called as HP Way. In the initial years, as per Flanigan (1996), Bill Hewlett and Dave Packard designed a management philosophy and an elegance of managing the business that has been singled out as a replica for American companies and famously known as “legacy to American business” for its democratic beliefs and exceptional virtues. The HP Way is transferred from one generation of employees to the next generation, mainly through the process of a gradual, subtle process of socialisation but not through the process of brainwashing (Zell 2007:36). New employees of HP are trained in the demeanours practiced by their managers and their colleagues; they slowly adopt and conform them as their own. The main goals of HP’s organizational culture was first framed in 1957, and since then, there are very little changes to it. Respect and trust for the individuals are always happened to be main objective of the HPs “HP Way.” Packard, one of the founders of HP wrote in his memoirs just before his demise in 1996 as “from the starting, Bill Hewlett and I have had a vibrant faith in people. It has been always significant to me and Bill to establish an atmosphere in which employees have an opportunity to be their best, to understand their potential and to be acknowledged for their accomplishment (Zell 2007:36). In terms of domestic passenger miles flows, Southwest Airlines is the fourth largest airline in USA. Southwest Airlines market capitalisation surpasses the aggregate of other US based airlines’ market capitalisation. Southwest’s unique culture, which is known as “goofiness,” keeps its employees’ morale very high. Southwest’s employees’ mission is enumerated as “dedicated to offer to their employees a steady work atmosphere with equal chances for personal growth and learning. Innovation and creativity are stimulated for enhancing the efficiencies of the Southwest Airlines. Further, employees are being offered with the same respect, concern and caring attitude within its organisational setup that they are anticipated to exchange externally with the each and every Southwest customers. Southwest Airline has perused a successful family organisational philosophy and employees’ turnover in Southwest Airline is considered to be the lowest in the US airline industry (Smith 2004:26). As per Herb Kelleher, founder of the Southwest Airlines, in the first year of operation, the airline witnessed cash crunch issues. The major question posed by the Keller and his management team, whether to lay off the employees or to dispose off some of the planes to save cash outflow so that Southwest can cater its short-run cash commitments. Keller had a meeting with his ground service people and informed them about the cash crunch issues. He suggested to the ground service people to minimise the turnaround time at the airport to 15 minutes from that of 55 minutes thereby enhancing the revenue earning capacity of the airline. The ground service people consented to the Keller’s proposal and fulfilled the goal. On his side, Keller fulfilled his part of the promise by not laying off the employees. After that, Southwest Airlines chiefly was in a survival mode. As per Herb Keller, Southwest Airlines is giving more focus on customers and employees as its own family and recognising them as treasured assets of the company (Smith 2004:27). Herb Kelleher and his chief managers accentuate a relaxed and easy-going corporate style that offers employees with widespread operational independence. Southwest Airline culture is to treat the employees as its “first customers” and its passengers as the second, which has been integral to the success of the Southwest Airlines. The culture of Southwest has transformed over the time to a culture of mutual respect, shared knowledge, and shared goals with over 29,000 employees. (Smith 2004:28). Respect to the employees and Organisational Success Showing respect to employees is significantly, positively, and strongly correlated to the success of the organisation. Employees who receive respect from their organisation are more dedicated and engaged than compared to those who do not receive such respect. Employee engagement refers to “the magnitude to which employees are motivated to contribute to success of the organisation and are ready to exert discretionary initiative to fulfilling the task that is vital to the accomplishment of organisational objectives. Thus, employees’ engagement includes commitment, enthusiasm for work, alignment with the organisational objectives; organisational pride and eagerness to exert discretionary initiatives are all features that were given as feedback in the earlier surveys conducted on the subject. The magnitude of engagement is as critical as it is strongly correlated to a host of outcomes like team and individual performance. Thus, an organisation success is more reliant on engaged workforce, which unfailingly outstrip their opponents. Whether showing more respect in an organisation will result in more committed employees? and the answer is always “yes.” By employing the Kenexa Employee Engagement Index (EEI), one research study quantified engagement by workers by evaluating satisfaction, pride, commitment, and advocacy. The outcome is straightforward, as employees who have pride in and are pleased with their organisation also seem to advocate for and continue with their organisation. Employees who receive what they desire from their organisation also regard their organisation as more formidable competitors. It is to be noted that organisation retains an incredible advantage when its employees really think that they are on a “winning team.”(Wiley & Kowske). Respect is regarded as a cornerstone of a high-performing, healthy workplace. Many successful organisation will be perusing a corporate policy framed around respect for employees’ contribution as a driver of performance. For instance, Coastal Pacific Xpress (CPX) differentiates itself in the trucking industry in the USA by employee-first policy and philosophy, which banks upon the fundamental principle of treating its truck drivers with due respect. For example, in case of western Canadian company namely “fired” was not successful as the management was abusive and disrespectful towards its employees (Wiley & Kowske 2011:162).IBM founder Thomas Watson in 1914 laid down the company’s basic belief- respect for the individual. (Lowe & Lowe 2010:114). IBM strongly believes in respecting the employees and endeavours to offer job satisfaction. Further, the group strongly believes that victimisation and harassment are not accepted on any footings. Santander offers employees with an atmosphere in which employee can work with peace of mind. The groups’ philosophy is to offer “respect to employees” which offer an atmosphere where employees could live with their families peacefully and amicably. Lloyds Banking Group strongly believes in respecting the individual employees and endeavours to offer job satisfaction. As per CEB quarterly, job stability is the top criteria, which the prospective employees are looking for from a new employer in addition to good pay, healthcare benefits, and respect. Thus , as per CEB’s Quarterly Global Labour Market research , the top elements’ which employees like for when searching a new job are a) stability b) good pay package, c) respect d) attractive healthcare benefits , e) better work-life balance. Now, respect also fall in the list of top five elements, which employees prefer, from a new employer. Thus, when we look the behaviour of employees from 2009 onwards, people prefer to accept jobs even with less pay where there they have due respect. Further, now employees pay more attention to look for increasingly comfortable workplace. Thus, employees are now looking for to be acknowledged and appreciated for their individual contribution (Casserly 2013). Trust and Respect in Supply Chain Management An empirical study carried over by Oberholzer-Gee and Calanog (2007) observed that trust enhanced the apparent switching cost and generate barriers to entry by new supply chain service providers. Customer found to be hesitant to change suppliers when they have a trusted supplier despite the fact the competitive advantages offered by a competitor. As per Dennings (2000), to improve the supply-chain management, it is advised to put a full stop to the practice of awarding supply-chain management contract on pricing alone. As per him, it is advisable to prefer a single service supplier for any one product, footed upon a long-term relationship of trust and confidence. (Autry et al 2013: 2). One of the major reasons why companies are not actively moving towards supply-chain management (SCM) is the lack of trust among trading associates to exchange significant information and to work in partnership on decision making. As per Coulthard, Castleman, & Batten (2004), medium and small enterprises pointed out technical support issues and the non­­­-availability of in-house skills as the two issues when inquired about obstacles for electronic supply chain management as both of the issues will affect the capability of a business to manage trust. The biggest challenge for designing the integrated supply chain system in Asia is that people’s cultural mind-set and mentality. Non-existence of trust is considered the main hindrance for designing an integrated supply chain for information collaboration and sharing. However, in Europe and in North America, even though collaboration and partnership are perused among business, customers, and manufacturers, challenge is felt in extending the partnership to Asia. Thus, an uninterrupted problem-solving and learning philosophy is acting as an essential element in the development of corporate culture in supply-chain management. Accordingly, for the effective supply-chain management, it requires trust, mutual respect, and exchanging of knowledge among partners and employees throughout the marketing channels (Lan & Unhelkar 2006:105). Conclusion Trust among the members of the organizational unit nourish that unit’s performance, chiefly, by improving motivation and directing the members of the unit initiatives’ towards attaining the established aims. Motivation backed by trust can nourish innovative creativity and thinking that results in an enhanced organizational attainment and enhanced productivity. Respect and trust for the individuals are always happened to be main objective of the HPs “HP Way.” Southwest Airlines is giving more focus on customers and employees as its own family and recognising them as treasured assets of the company. Showing respect to employees is significantly, positively, and strongly correlated to the success of the organisation. In an atmosphere spiralling global competitiveness, business organisations should find ways of enhancing or retaining their competitive position. One of the methods in which business organisations can accomplish this is being innovative with regard to their services, products, and processes. Thus, high magnitudes of trust within an organization are an essential requisite that must be catered so as to realising the potentials. If high magnitude of trust were responsible in accomplishing the probable inherent in the higher levels of diversity in the workforce of most of the contemporary organisations, this success could act as a significant replica for social integration for society as a whole. List of References Alston, F. (2013). Culture and Trust in Technology Driven Organisations. London: CRC Press Autry C W, Goldsby TJ, Bell JE & Hill, A V. (2013). Managing the Global Supply Chain. London: FT Press Casserly, M. (2013). The Top Five Reasons Employees will quit in 2013. [online] available from < http://www.forbes.com/sites/meghancasserly/2013/01/02/the-top-five-reasons-employees-will-quit-in-2013/> accessed 3 July 2014 Dani SS, Burns ND, Backhouse CJ, & Kochhar AK. (2006). The Implications of Organisational Culture and Trust in the Working of Virtual Teams. Proc.IMechE Vol. 220 (B), 951-960 Lan Y & Unhelkar B. (2006). Global Integrated Supply Chain System. London: IGI Lowe & Lowe, GS. (2010). Creating Healthy Organisations. Toronto: University of Toronto Press Smith, G. (2004). An Evaluation of the Corporate Culture of Southwest Airlines. Measuring Business Excellence, 8(4), 26-33 Wiley J & Kowske B. (2011). RESPECT: Delivering Results by Giving Employees What They Want. London: John Wiley & Sons. Zell, D. (2007). Changing by Design: Organisational Innovation at Hewlett-Packard. Cornell: Cornell University Press Read More