Managing in an Era of Mistrust – Caring is the Key to Maintaining Labor Harmony | by Rick Garlick, Ph.D.
The corporate scandals of the last several years have created an environment of mistrust between employees and their leaders. While maintaining harmony between labor and management is in everyone's best interest, this seems to be anything but the case in today's work environment. Union hotel workers in New York, San Francisco, Los Angeles, Honolulu, Boston, Chicago and Washington, D.C., with contracts set to expire within a few months of each other this year, showcase the ultimate situation in poor labor relations – the possibility of a strike. This is probably the clearest demonstration of how poor labor relations directly impact the livelihoods of both management and labor within the hospitality industry.
Maritz Research conducted an on-line study of over 1300 full-time employees across North America to study worker attitudes on a wide variety of areas, including the attitudes employees held toward their managers. Five hundred of these employees identified themselves as working within the service industry. Maritz has consistently found that responses among the general service industry directly parallel attitudes reflected in the hospitality industry. Among the key findings were the following:
- 10% strongly agreed that their companies genuinely listened to and cared about their employees; 32% disagreed
- 11% believed that everyone at their companies were all on the same team, working toward the same goals; 33% disagreed
- 9% completely trusted their employer to look out for their best interest; 40% mistrusted their employers
- 8% felt that their senior leaders' actions were completely consistent with their words;
- 3% believed that their senior leaders acted inconsistently
- 9% describe the relationship between labor and management at their companies as 'extremely positive'; 49% describe the relationship as 'lukewarm' or 'negative'
It's Not All About Money
Management-Labor disputes have traditionally been fought over pay and benefits. Compensation packages are certainly important to everyone. The Maritz study showed that those that felt most positively about management relations provided the highest ratings of satisfaction with both their pay and benefit packages. However, when Maritz examined the predictive relationships between the various areas it measured and evaluations of management relations, it found that the extent to which employees felt their companies cared about them, the degree to which they trusted their leaders, and believed their leaders to act consistently, were at least twice as important as pay and nearly three times as important as benefits, in predicting the state of labor relations. This suggests that satisfaction with pay and benefits may, at least in part, be determined by the degree to which employees feel their leaders are genuinely looking out for their best interests. When trust exists, labor is more likely to believe that they are receiving a 'fair deal.'
Work-Life Balance is Also a Critical Issue
Another area that was a strong predictor of how workers felt toward management was the degree to which companies showed concern about balancing work and personal responsibilities. Other Maritz studies have shown work-life balance issues to be among the most significant predictors of turnover. This represents another great area of opportunity for employers as only 9% believed that their 'organization actively works to help its employees achieve an appropriate balance between work and personal life' and only 12% agreeing that work expectations at their company were 'realistic and fair.'
Do Unions Make a Positive Difference?
Eleven percent (11%) of the total sample in the study was a member of a labor union or a collective bargaining unit. While these employees rated their satisfaction with pay and benefits significantly higher than others, they were significantly more distrusting of management, significantly less likely to believe that their companies cared about them, and significantly less satisfied with the work-life balance. Whether negative conditions between labor and management initially contributed to unionization, or whether labor unions have driven perceptions of mistrust, one thing is for certain: union employees are significantly more likely to be at odds with their leaders. Increasing pay and benefits has done nothing to increase good will.
Labor unions generally thrive on solidarity among co-workers. Another interesting finding is that trust among co-workers is not much better than trust of managers. Maritz found that only 9% 'completely trusted' their co-workers to look out for their best interests. Thirty-percent (30%) indicated that they did not trust their co-workers. These percentages were nearly identical for both union and non-union workers.
Implications
Across all industries, the state of labor relations is currently at a very low point, among both union and non-union employees. The hospitality industry is no exception. While unions may exacerbate the adversarial relationship, they at least seem to be associated with greater pay and benefit satisfaction. Unless companies work significantly harder to build trust, labor unions will continue to exploit the bad blood that exists between employees and their leaders.
Here are a series of practical steps that employers may consider to improve the state of labor relations:
Provide meaningful recognition/incentives to employees: Employers profit due to the efforts of their workforce. Employees generally understand that their jobs may be in jeopardy during periods of a struggling economy and are willing to work harder just to keep their jobs. However, when economic times are good, employees recognize that their efforts have contributed to the financial success of the organization. When companies are perceived as stingy or not willing to share their financial success with the labor force, it creates resentment. While it is not possible to give all employees a cash bonus or have them participate in profit sharing, it is important to recognize and reward employees in ways that they find personally meaningful. The Maritz study found that only 8% of the workers surveyed felt that they were 'consistently recognized in ways that are meaningful.' Previous Maritz research found that there is generally a large disconnect between how employees wanted to be recognized vs. actual company recognition practices.
Communicate openly and honestly:
Only 7% of the workers surveyed said that they were completely satisfied with the way that their organizations communicated with them. Forty-three percent (43%) were dissatisfied with their companies' quality of communication. Providing greater means for employees to communicate upwardly to their leaders is an important first step. The willingness to communicate openly with leaders is a direct function of the trust employees feel toward those individuals. It is important for managers at all levels to communicate as sincerely and openly with their subordinates as possible. (Of course, 'open communication' may not be advisable if senior managers are genuinely insensitive to employee concerns. The suggestion of open communication is contingent on the assumption that leaders genuinely do care about their people.)
Understand that employees have a life outside of work:
Conventional wisdom suggests that work and personal concerns should be kept separate. To believe that this is possible is extremely misguided thinking. Employees have concerns outside of work that directly impact their ability to maintain focus on the job. This is not to suggest that managers need to become personal counselors. However, employers should not dismiss personal issues as irrelevant. Currently, one-in-five employers feel that their supervisors are 'concerned about their personal well-being.' Employers can communicate empathy and understanding without appearing 'soft'. The perception that a company 'genuinely listens to and cares about its employees' was the most significant predictor of labor-management relations out of 30 items measured on the Maritz employee survey.
Act consistently:
Nothing contributes more to a perception of mistrust than when employees are given inconsistent messages. For example, Maritz worked with a hotel that was struggling in its customer satisfaction scores. Front desk employees complained that they would be encouraged to refund dissatisfied guests money one day and then reprimanded for the same action the next day. Executives that talk about the importance of employee performance, yet fail to give them what they need to do their jobs effectively, invite skepticism and distrust.
Encourage managers to spend individual time with employees:
Managers should spend at least one hour per quarter with their direct reports. This time should not just be a performance review, but rather a time when the employee can voice concerns, as well as express his or her own interests for professional development. Maritz has found that the lack of development opportunities is perhaps the single most important reason why employees leave companies. Presently, only 11% feel that they have 'real opportunities to learn and develop' at their companies.
Conclusion
Many companies are currently fostering conditions for a distrustful workforce that will eventually be to their detriment. Companies would benefit greatly by discovering this fact sooner, rather than later. While few would argue that keeping employees engaged is important for the overall health of the organization, many hold on to antiquated management theories that stand in the way of building better relationships with their workforce. Others recognize that there is perhaps a real cost to invest in employees, both in time, money, and effort. These leaders strive to get by using the old mushroom theory (e.g. 'Keep employees in the dark, occasionally throw manure on them, and they will be fine.') When leaders manage by this type of principle, they endanger their business by inviting workforce dissension and even possible unionization. By enacting the principles set forth in this paper, they may avoid such a fate. This is a particularly pressing concern for the hospitality industry at this time.
Date: Volume 19 - July 2006
About Maritz Research
As one of the world's largest marketing research firms, Maritz Research, a unit of Maritz, helps many of today's most successful companies improve performance through an actionable understanding of their customers, employees, and channel partners. Founded in 1973, Maritz Research offers a range of strategic and tactical solutions concentrating primarily in the automotive, financial services, hospitality, telecommunications and technology and retail industries. The company has achieved ISO:2 0252 registration, the international symbol of quality. Maritz Research is a member of CASRO and official sponsor of the American Marketing Association.
