Raj Rajaratnam, billionaire founder of the Galleon Group, a major hedge fund, is led in handcuffs from FBI headquarters in New York Oct.16, 2009 (Louis Lanzano)

Management

Why bosses aren't trusted

From Friday's Globe and Mail

Do you believe your boss is honest? More employees than you might think are having their doubts.

Last week, U.S. authorities arrested billionaire hedge fund manager Raj Rajaratnam, founder of the New York-based Galleon Group hedge fund, and charged him and executives of other companies with trading inside information in exchange for payoffs. Government officials credited evidence that was gathered by one of Mr. Rajaratnam's former employees, who reportedly taped conversations with him.

While that's an extreme example of mistrust, results of a survey released this week show that 53 per cent of American employees harbour suspicions that their boss is being dishonest with them. In fact, 25 per cent say they don't even trust their boss to give them the truth about whether their job may be at risk, according to a Harris survey of 2,081 adults done for staffing service Adecco North America.

It's not that most employees think their bosses are crooks or are outright lying, but they suspect a cover-up by management, says Bernadette Kenny, Melville, N.Y.-based chief career officer for Adecco.

"Workers today clearly worry that they are not getting the full picture about how they are perceived in the organization and about how the company is doing financially," she says.

Her prescription for leaders: There's no such thing as overcommunicating.

That means, in addition to public meetings and memos, more individual feedback, performance reviews, pats on the back for doing things well, and private asides to coach employees.

The need is borne out by another survey that found, even if the messages are negative, employees are craving more communication from their boss in the wake of the global recession.

The survey found that 66 per cent of employees believe they have too little interaction with their boss. That's up from 53 per cent who complained of a lack of feedback in an earlier poll in May, 2008, before the recession took hold.

"When times get tough, managers become avoidant. Focusing on spreadsheets seems a lot easier than talking to employees," says Mark Murphy, chairman of Washington-based training company Leadership IQ, which did the survey that included 3,611 office and health care employees in Canada and the United States.

"Not only might they [managers]get hit with questions they can't answer, but when their own stress levels are through the roof, the last thing many managers want is to meet the emotional needs of their employees. But this is precisely the time that employees really need lots of feedback, and they need it to be very high quality," he says.

That's not as daunting a task as it may seem, Ms. Kenny says.

It really comes down to something simple: "That the organization department and team are told exactly where they stand from a performance perspective, and where the company stands in a competitive environment," she explains.

"Performance reviews should not be thought of as annual events, they should almost be a daily event you need to seek coachable moments," Ms. Kenny says.

In the aftermath of a recession, "good communicators should be having regular conversations with employees, pointing out that each individual has a part in making a recovery happen."

Mr. Murphy agrees that providing information to employees is essential in a tough economy. "Especially in these stressful times, employees are desperate for feedback and interaction with their boss. And when they don't get it, their job performance suffers."

But what if the outlook is bleak? How do you present a message that, even if people work hard, there may not be a reward.

"The message has to be, 'If you work harder that will have a direct impact on how well we do, how many products we sell and how stable and growing the company will be as a result,' " she says.

As an example of good leadership communication, she points to Hewlett-Packard, which has a good reputation as a transparent organization.

On the company website in February, chief executive officer Mark Hurd laid out in detail the company's sales decline and explained why he was asking employees to take a pay cut, and that he was taking a pay cut himself rather than having to do layoffs.

It said in part: "I think we are fundamentally sound, and when the economy picks up, I want HP to be strong, and to take share and to outgrow the market. I said it last quarter, my goal is to keep the muscle of this organization intact. But we do have to do something ... because the numbers just don't add up and we need to have the flexibility to make the right long-term investments for HP."

This was very well done, Ms. Kenny says.

"He laid out the specifics about how the company is doing and why the decision is made and pulled no punches and didn't try to fluff it up to soften the blow."

Another leader who has been effective at laying out the realities include General Electric CEO Jeffrey Immelt, who didn't try to sugar-coat the facts in a speech he made in Singapore at the end of September, she says. He publicly laid out the company's balance sheet and warned that high unemployment and reduced consumer demand will be a long-term drag on economic recovery.

"A lot of the jobs lost in financial services and construction are never coming back," Mr. Immelt predicted. That might not have been what employees wanted to hear, but it was reality, Ms. Kenny says.

"Employees have a right to hear about brutal results, because they are the truth," she says.

"Brutal honesty is the best way to get the message out about bad business conditions and many managers don't want to be the bearers of bad news," she says. "If things are bad and the market has collapsed, employees probably already know it already. If you sugar-coat the truth, you're going to be caught out for trying to hide the facts.

"And the brutal truth at the moment is that, while we may be entering a recovery, it is not going to happen this afternoon; companies are not going to just turn around and be back to business as usual. It's going to take a long time," Ms. Kenny says.

"It's that kind of honesty that is going to win you respect from the employees who are going to be the ones to find ways to recover," she says.

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Survey snapshots

A look at the highlights of two surveys showing how the recession has affected employees' relationships with their bosses: 28%

Portion of workers who said they would fire their boss if given the option. 14%

Portion who gained respect for their boss during the recession. 65%

Portion who said they wouldn't change anything about their relationship with their boss. 87%

Portion who believe their bosses take performance reviews seriously. 89%

Portion who said a good, trusting relationship with the boss is the foundation for job satisfaction. 67%

Portion of workers who say they don't get enough feedback from the boss.

Sources: Survey by Leadership IQ; Harris survey for Adecco North America