A popular question these days is: What’s behind employee engagement?

If you were to really look into it, what would be the most important factor behind the curtain, pulling the levers making workplaces engaged and productive?

Research and various surveys are increasingly pointing to an answer: employee trust.

But what builds trust, and how does it impact work and engagement?

Trust is…

One thing about employees who trust their superiors, and vice-versa — they don’t just materialize out of thin air. As Fernando Flores and Robert Solomon in their book “Building Trust in Business, Politics, Relationships, and Life” put it:

“We make decisions to trust… We come to have expectations of others, and we respond to the fulfillment or frustration of those expectations. Trust isn’t something we ‘have,’ or a medium or an atmosphere within which we operate. Trust is something we do, something we make.”

Trust is a widely encompassing concept, stretching into all areas of our lives — personal and professional.

This is something we all intuitively understand. But trust shows up in different forms, and has different value, in different environments.

The question then becomes: what does trust look like — and mean for — the workplace?

Trust is a currency

Trust is like a workplace currency in that its value is demonstrated through exchange — it is given and received. This means employee trust is revealed through employees’ behaviours. The same holds true for management.

And, like all currencies, trust is convertible into real-world value. How? Through increased employee engagement and resulting improved productivity.

While the idea that trust translates into better business outcomes was once a somewhat controversial idea, numerous studies have since borne it out.

Research by Forum cites 10 years of studies finding that organizations which put a priority on trust have some major advantages:

  • 16% greater profit margin
  • 19% greater operating margin
  • 18% greater productivity
  • 2.6 times the earning-per-share growth of less-trusting companies.

Huge improvements on bottom-line figures, in other words.

Trust is linked to performance

Employees and leaders recognize the importance of trust. Which is good, because where there’s employee trust there’s good performance.

Research by Towers Watson discovered that eight out of 10 highly engaged employees have trust and confidence in their leaders. Another survey notes that 90 percent of engaged employees trust their immediate superior, and concludes that “managers who develop an awareness of trust, and how to earn it, will have much greater success in engaging their team members.“

Not surprisingly, this translates into performance — to productivity and getting stuff done. One poll found that a whopping 82 percent of employees cited trust in their superiors as vital to their job performance. Forum uncovered even higher numbers for company leaders, universally all of whom called building trust of “great” or “very great” importance to their business.

But widening the lens reveals there’s a trust gap between the priority of those at the top and the sentiment of employees themselves.

Looking at workers overall — both the engaged and the disengaged — Forum also reveals only 40% of employees said they had a high level of trust in their bosses.

And, even worse, a major American Psychological Association study discovered that a shocking one in four workers don’t trust their employer. At all. Meanwhile, one in three said nearly the same thing: that they felt their bosses weren’t always honest or truthful with them.

Not good. But there are valuable lessons to be learned here, as well as steps to take that will improve things.

Trust is a two-way street

Between management and emploTrusistheCore_2wayStyees, who both have an interest in building trust at work — and have some common ground.

According to a global trust survey by PR giant Edelman, employees and executives agree that “treating employees well is one of the most important things a company can do to build trust.” No dispute there.

However, the survey also revealed another area of agreement that is more concerning: both groups say companies aren’t doing enough when it comes to building trust.

How to do this has been subject to many articles. However, if you boiled them down, you’d find that one of the key factors (and areas where action can be taken) is this.

Trust is built through transparency

Organizational transparency is strongly connected to employee trust. That’s what one study of a US health care organization found:

“As organizations become more transparent they will also become more trusted.”

Transparency in this instance meant doing a better job of sharing information with employees. What this means, in part, is not hiding problems.

One good example of the power of disclosure to employees is the story of an unnamed professional-services firm struggling to meet revenue targets. But rather than do things the old-fashioned way and chart a course of action themselves, management instead sought help from employees (who of course had an interest in the outcome).

They did this by showing employees a list of all possible changes and gathering feedback. And it worked. This bold act of transparency through information disclosure and feedback-gathering in turn generated buy-in for the steps needed to get the company back on track. And, to boot, it increased employees’ willingness to execute the plan.

The result? The company made the changes without needing to lay anyone off. Win-win.

What’s going on here?

By transparently opening up information and gathering feedback from employees, managers earned employee commitment by revealing the process behind their decisions, and took input on those decisions. This “show your work” factor made those decisions more trustworthy in the eyes of employees, and in turn they trusted their company back.

Want more? We’ve taken some need-to-knows about workplace trust and beautifully visualized them in an awesome infographic titled Trust & Performance. Check it out!

A version of this post first appeared on the SoapBox blog.