20 May 2009

Why People Quit, and Understanding Trust in Organization

The Globe has a story this morning, reporting on a survey done by David Aplin Recruiting. “A Canadian survey of more than 1,600 respondents to be released Wednesday suggests a lack of trust in senior leaders is the main factor behind their departure. The poll was conducted in May by David Aplin Recruiting. Insufficient pay was the second most common reason to leave, followed by an unhealthy or undesirable workplace culture.” In contrast, a similar survey taken a year-and-a-half ago found that “the number 1 reason employees quit, according to a new [as of December, 2007] survey, is being asked to do something unethical.

What is interesting is that managers seem to have no clue. When asked about the main reasons for their employees’ departures, “Canadian managers and human resources professionals ... listed pay as the top reason, followed by an unexpected job offer or a decision to change careers.

Why the disconnect? I think it can be easily explained in Valence Theory by considering the construct of trust, and understanding the difference in effects between the ba- and fungible-forms of valence relationships.

It is common to think of organizations as a purposeful, well-functioning machine, producing goods or services for its target markets. The people who comprise the organization are ideally dedicated to the mission or vision of the organization, and direct their daily efforts to fulfilling both their individual and collective objectives. But how does a machine create trust? Certainly, one can “trust” a machine if we know that it is consistently reliable and is a good producer.

Building trust among people is not all that different from trusting a machine. Trust is related to how well we can manage future expectations about our organizations, and individuals in that organization, amidst various degrees of uncertainty. That relative uncertainty depends on our perceived degree of risk associated with continuing our association with, or membership in, a particular organization. When a decision is perceived to be of relatively low risk – for example, do I go to work this morning? – familiarity with the daily routine is generally sufficient to make that decision. Familiarity is purely cognitive – it’s knowledge with little emotional attachment or investment. A decision with a higher perceived risk –something that may affect one’s life over a longer period of time – requires more than just knowledge. We begin to feel the tug on emotional responses that are based on our prior experiences with the organization’s behaviours, decisions, and responses to external forces. A history of positive experiences instill sufficient confidence to enable us to make the decision to plan to continue to go to work over the next number of months. It is confidence that makes the unknowable future momentarily certain.

What happens with the perceived risk is relatively high, when what is at stake is our social standing, or business survival, or our health, livelihood, or life? In such cases, the decision to truly vest in the organization ties directly to emotion, with knowledge used secondarily to verify and justify the decision. Emotional perceptions draw from a history of confidence with the organization, its prior actions and those of its leaders, that would enable the suspension of cognitive judgement that otherwise creates a “fear of the unknowable” precluding any decision. It is trust derived from the history of emotional perceptions that is required for the individual to make that leap of faith to continue for the long term with that organization. Familiarity. Confidence. Trust.

Trust begins with the knowledge that creates familiarity, and moves through a complex interaction of knowledge and emotion that builds confidence, and finally to the emotional connection that enables trust – that leap of faith which overcomes fear of the unknowable. And there’s the problem: engendering trust involves much more than knowledge, so merely providing information – let alone only tangible rewards and incentives – is not sufficient in itself. And, perhaps aside from certain automotive or technological machines about which some people become terribly emotional, how does one think about creating emotional connections to organizations-as-machines?

When you stop to think of it (or if you’re a long-time follower of this blog) the view of organization as machine is, of course, an artifact of the Industrial Age. It is this mechanical, purposeful conception of organization that creates the BAH construct: Bureaucracy, Administrative control, and Hierarchy. And as I’ve found in my research, BAH organizations emerge from the fungible-form of the valence relationships. Little wonder, then, that managers who are themselves vested in BAH would see weakening of the fungible relationships as the primary reasons for employees who quit: pay (f-Economic), a new opportunity (f-Identity), an unexpected offer (f-Socio-psychological).

According to the employees themselves, however, it’s primarily about trust. Trust comes from both cognitive and affective, (emotional) connections and experiences. Expressed in terms of the valence relationships, trust is an emergent property of the complex interactions among the valence relationships that create organization. Strong Knowledge relationships (information, experiences, expertise, and opportunities) and Socio-psychological (feelings and emotions) relationships. There is also a lesser, but important, interaction with the Identity valence relationship (one’s self-conception). Although trust can emerge from the right sorts of interactions among the fungible relationships, in BAH organizations the fungible relationships are (a) primarily connected to f-Economic; and (b) easily subverted by what is perceived as a “better deal.” As well, giving more pay, increased benefits and perks, or a “better” title – all aimed at shoring up fungible relationships – are often cynically interpreted as compensating for that which is inherently lacking in the organization.

In UCaPP organizations, the ba-form of valence relationships predominate. Not only is it more difficult to subvert the “ties that bind” in an organization with strong organization-ba, the conditions that create organization-ba in the first place are precisely those that engender deep and pervasive trust among all the members. This involves creating an environment of Knowledge-ba where little is hidden and much is shared, Socio-psychological-ba that creates strong intrinsic motivation among the members, and Identity-ba reflecting a strong sense of belonging, community, and inclusiveness. Economic-ba – demonstrably being valued by the organization for one’s contribution, often in substantive but non-tangible ways – doesn’t hurt, either. All of these contribute to creating a strong, motivating, encouraging, and – dare I say it – empowering organizational culture, addressing both the number-1 and number-3 reasons employees quit.

Trust is not a relationship in itself; it emerges from rich, multi-faceted relationships that are consistent in their effects over time. As employees are connected to their respective organizations through the five valence relationships, so too are consumers. What this means is that, according to this new model of organization, consumers and employees are, in effect, equivalent. Becoming trusted means treating both constituencies honestly and openly, enabling employees and customers alike to develop the type of confidence in all aspects of their valence relationships that eventually leads to mutual trust. For organizations this means more than retaining its employees; it means maintaining and growing its customers and its community connections in ways that are sustainable, even through challenging times.

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