5 Reasons Why Employees Lose Trust in Leadership

Trust is a vital aspect of any significant relationship, including the interaction between leaders and their employees no matter the organisational level. Building trust among people requires confidence, sincerity, open-mindedness — and time to prove that trust is genuine and trustworthy.

By understanding the following five reasons that explain why employees can lose trust in management, the leadership team can avoid poor morale, lost productivity, and a disengaged workforce.

Reason #1. Not Telling the Truth

When leaders consistently say something, but end up doing something else, they create a sense of unreliability and cynicism. Leaders need to be truthful and deliver on what they promise. In essence, leaders must talk and walk the truth, which is the key strength of true leadership.

Employees are adults and should be treated as such, with management recognising that they are capable of handling the truth, whether positive or negative. While it is important to share optimistic news, changes, accomplishments, and progressive steps forward, it is equally important to keep employees in the loop concerning challenges, obstacles, or goals that were missed. If handled correctly, sharing the ups and the downs of the business can create a sense of unity and inspire employees to cooperate for the greater good of the company.

Reason #2. Lack of Transparency and Communication

Employees who feel kept in the dark about crucial company decisions or lack open communication channels with their leaders are more likely to lose trust — particularly damaging during times of change or uncertainty. Employees must believe that their leaders are capable of making optimal decisions.

The most effective leaders make objective decisions based on facts and data, not emotions (although intuition, based on valid experience, may also come into play). As a result, transparency is the foundation of their decision-making process, excluding any bias driven by self-interest. When reaching a decision, they listen to knowledgeable experts within (and external, if appropriate) the organization, gather all pertinent facts, consider alternatives and options, and explain the rationale behind their decisions through transparent actions. They do not proclaim “this is so,” but rather “this is so and here’s why.”

To achieve transparency, leaders must ensure smooth and effective communication, encouraging an open path of communication between management and employees. The workplace culture should welcome honest, open communication between different levels of the company, which ultimately requires trust and an unspoken rule of positive feedback and constructive criticism.

Reason #3. Inconsistent Standards

If employees perceive leaders as engaging in inconsistent behavior, such as favoritism or discrimination, this situation erodes trust significantly. Additionally, applying different standards and expectations to different employees creates a sense of unfairness and undermines trust.

For example, when an undeserving or unqualified employee earns a promotion or pay raise because of the “good” relationship with a manager, the predictable results are grumbling, unmotivated employees who wonder why they should bother doing their best. In fact, they lose any trust they might have had in the manager, as well as in the company’s so-called fair policies and procedures.

Reason #4. Incompetence

When employees lose faith in their leader’s ability to make sound decisions or guide the company towards success — due to inexperience, ignorance, poor decision-making, disinterest, or other reason — disengagement and distrust are also very possible results. Some of these poor leaders also have no idea as to where the company’s future lies. Naturally, if the leader has no clear direction, neither will the workforce.

With employees feeling like they are spinning their wheels, or working for management that is clueless, they lose their own focus. Incompetence trickles down, until, eventually, there is a negative impact on the trust that customers and shareholders had depended on.

Reason #5. Lack of Recognition

Employees who feel their contributions and efforts go unnoticed or undervalued are less likely to trust their leaders. Showing genuine appreciation and recognition for their work is crucial for building and maintaining trust — not to mention boosting their engagement and willingness to perform their best.

Genuine leaders acknowledge the skill level of individuals within their care, recognising that not all employees can help achieve the organisation’s objectives. That said, if there is trust between management and the workforce, with all individuals working in the most suitable position commensurate with their skills, then all have the potential to do their best within the honest limitations of their capabilities.

Leaders Carry the Burden of Trust

Trust — that delicate concept among people — is possible within an organisation if the leadership team exhibits consistency, expertise, truth, transparency, and appreciation. Adding a dose of compassion, leaders can transform a mediocre organisation into a state-of-the-art industry leader that optimises the talents of every individual and outperforms the market. But the core factor to accomplish this feat is trust, whereby employees trust their leaders to take right actions and leaders trust employees to do their best work. While leaders carry the burden of engendering trust, employees, too, must make their own effort to ease that burden.