It pays to be honest with employees. Recent research profiled in the LSE Business Review looks at how HR management practices are perceived by employees, and how those perceptions influence morale and performance. The research shows that employees’ belief about whether HR’s main purpose was to help them improve their performance or to save the company money has an effect on how they feel about their jobs.
As the piece says, “At a large construction and consultancy organisation in the UK, 180 employees answered two questionnaires that were administered 12 months apart. The results of our analyses of this survey data corroborated our theory. Specifically, we found that employees who believed that their organisation’s HRM practices were designed to increase their performance were more likely to be involved in their job, leading to higher levels of wellbeing. Conversely, those who believed that HRM practices were designed to decrease costs felt burdened by their work, and had lower levels of wellbeing.
“The findings of our research has direct implications for how organisations communicate the intent of the HRM practices that they administer. If employees perceive that these practices are meant to reduce costs – regardless of the actual strategic intentions – they experience increased workload and emotional exhaustion.”
Honesty is the Best Policy
Not only does the research have interesting implications for how HR “markets” itself to the rest of the company but especially how it does so if it has a mission to increase performance and reduce costs. As the piece goes on to say, “Should organisations purposefully deny a cost motive? That’s probably an unwise decision because most employees understand the reality that HRM [HR management] policies and practices must be designed with an eye on cost in order for the organisation to remain financially competitive. Honest leadership is credible and therefore more persuasive.”
This chimes with CEB’s work on how to make big change management projects successful. One of the seven lessons of successful change is that employees don’t have to like change to help it succeed, but they do need to understand why it’s happening.
Also, involving employees directly in an “open source” process of planning and implementing change improves its chances of success. As the LSE research notes, employees are adults who appreciate that their employers need to keep an eye on the bottom line at all times. Being forthright with employees about the reasoning and motivation behind HR decisions that affect them builds trust and fosters the understanding that is necessary to succeed in a business environment of constant change.