[The following news item appears in _Quality_Progress_, July 1994
edition, pages 14, 16, and 17.]

                        PUBLICATION SUGGESTS THAT
                      BUSINESS LEADERS MUST REGAIN
                             EMPLOYEE TRUST

     A recently published monograph, "The Psychological Contract
of Trust," suggests that business leaders must regain the trust
of their employees. In the 1970s and 1980s, layoffs, mergers,
reorganizations, and other business activities destroyed trust
between workers and managers.

     The author of the monograph, Robert W. Rogers, chief
operating officer of Development Dimensions International (DDI),
Inc., said creating an environment of trust is crucial to being
able to keep good employees, forge stable internal and external
partnerships, move all employees through organizational changes,
and nurture an empowered work force. The publication illustrates
problems and offers possible solutions.  

     Rogers cited seven instances when distrust and defensiveness
are most likely to occur:  

     -- Top management is feared.  
     
     -- Excessive pressure is placed on people.  
     
     -- Sales are low.  
     
     -- Emergencies arise.  
     
     -- Labor pressures exist.  
     
     -- The vision of the company is unclear.  
     
     -- Cultural unrest exists.  
     
     To break the cycle of fear and distrust, Rogers stated that
senior leaders must plan and develop trust-building strategies
that directly influence the level of trust people have in their
organizations: the organization's vision and values, the
compensation system, the work environment, and personnel
decisions.  

     Of trust and the organization's vision, Rogers wrote, "Most
organizations today have a formal vision statement....The
question, though, is whether individuals own the vision....If the
vision is too vague or too broad, unattainable, or ignores the
role individuals play in achieving the vision, people find it
hard to trust the direction in which their organizations are
heading." Rogers lauded the vision statements of Wal-Mart
(low-cost provider), Motorola (six-sigma quality), and Federal
Express (people-service-profits) .  

     Of trust and the compensation system, Rogers stated that
senior leaders must:  

     -- Share salary ranges with associates and not individual
     compensation information. If people assume a company is
     forthright about an important topic like compensation, they
     can trust the organization in other areas as well.  
     
     -- Base merit-pay decisions on fair, objective data that
     reflect actual performance levels.  
     
     -- When possible, quantify bonus systems to avoid
     discretionary decisions on bonus amounts. 
     
     -- Ensure that the human resources department conducts
     internal and external equity comparisons. 
     
     -- Base senior executives' pay on results. 
     
     Of trust and the work environment, Rogers said, "The
environment in which individuals work plays a significant part in
their perceptions of senior management and how much top-level
managers really care about people....For example, office decor,
type of furniture, carpeting, and windows all communicate how
much senior management cares about people's sense of comfort and
satisfaction with the place in which they work....If senior
management has significantly more extravagant furnishings, its
credibility and trust is at risk." 

     Rogers wrote that one of senior managers' most difficult
personnel decisions relates to substandard performance that leads
to dismissal. In many cases, it is easier to look the other way
or give people several chances to improve. Senior managers,
however, must realize that inaction erodes people's trust in
them. It also causes people to question why they work so hard to
meet performance expectations if performance doesn't really
matter. 

     To order a copy of "The Psychological Contract of Trust,"
call DDI at 800-944-7782. The cost is $12.