Corporate Scandals are damaging productivity

  26th July 2012      
 CIPD, Company News

The latest quarterly Employee Outlook survey released by CIPD yesterday, shows that corporate scandals are eroding trust in senior leaders and will have a damaging impact in employee engagement.

The Employee Outlook survey, of more than 2,000 employees across the UK, asked employees a number of questions to gauge their level of engagement in the work place and attitudes to working life. The survey revealed that only 36% of workers trust their senior leaders and more than half (58%) of workers display signs of having adopted a ‘not bothered’ attitude to their work.

The survey found that employees who display ‘neutral’ engagement are about half as likely to go the extra mile with regard to workload and hours, than those who are engaged*, and nearly three times more likely to be looking for a new job**. It also found a strong correlation between employee engagement and knowledge of the organisation’s core purpose***. These findings align strongly with the significant body of evidence cited in the MacLeod Review regarding the impact of employee engagement on performance.

Peter Cheese, Chief Executive at the CIPD, comments: “Given the number of examples reported in the media in recent months of unethical behaviours and corrosive cultures overseen by senior leaders, it is perhaps unsurprising to see trust in the workplace eroding. What’s worrying is the impact this will have on engagement. We know that strong employee engagement drives higher productivity and better business outcomes, so such a prominent display of ‘neutral engagement’ in the workplace should act as a real wake up call for employers.

“Now more than ever, organisations need to pay close attention to the impact the behaviours of senior leaders is having on the rest of the workforce and consider how they can improve corporate culture from the top down. The HR profession is uniquely positioned to help organisations properly understand existing cultures and behaviours, to re-examine and re-define corporate values and to revisit the way in which those values are reinforced, incentivised and rewarded through the day-to-day behaviours by managers – from the very top down to the front line.

“Employees also need to believe their views are respected and that they have a voice in the organisation, otherwise there is a risk that when things go wrong, no-one tells the executive team until it is too late. Just as importantly, empowered and engaged employees are able to provide customer inspired innovation and ensure organisations’ products and services adapt quickly to take advantage of fast changing markets.

“Building trust in senior leaders and employee engagement requires a shift away from traditional command and control styles of leadership to a distributed leadership model where managers at all levels have the ability to win hearts and minds, and get the best out of their people in the service of the organisation.”

* Those who are engaged scored on average +69 in terms of their likelihood to go the extra mile, compared to an average score of +37 for those who are neutrally engaged and -18 for those who are disengaged.
**Of those who are neutrally engaged, 26% reported they are looking for a new job, compared to 9% of engaged employees and 66% of disengaged employees.
***Those who are engaged scored on average +98 in terms of their likelihood to know the core purpose of the organisation, compared with an average score of +69 for neutrally engaged and -23 for those who are disengaged.

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