A little TLC goes a long way

In this tough economy, managers, take note: You can never treat employees too well, a new study suggests.

Managers whose support and trust create good long-lasting relationships with employees will find workers willing to forgive and forget just about anything, including layoffs, while those in bad relationships with their bosses will react like jilted lovers, the study found.

"Employees who feel positively about their boss and company tend to give them the benefit of the doubt and keep performing, instead of feeling angry and betrayed when their expectations are not met," says Jacqueline Coyle-Shapiro, a professor of organizational behaviour at the London School of Economics and Political Science, who co-authored the study with Tanguay Dulac at the London School of Economics and Prof. Sandy Wayne and doctoral student David Henderson, both at the University of Illinois at Chicago. It appears in the current issue of the Academy of Management Journal.

"That ought to be especially good news today, when economic conditions have rapidly declined and when expectations raised even a few months ago can easily be disappointed," she says about the study, which looked at employees at three European companies.

The findings disprove a common management theory that raising employee expectations too high creates a "psychological contract" that they will be supported for better or worse, and so if what they receive does not live up to their inflated expectations, they'll feel betrayed and angry.

Rather, those who have been in a supportive relationship are willing to accept that anything that happens is being done for the best.

The study comprised two surveys of 152 white-collar employees. One asked them to rate the extent to which their company supported, cared about and valued them, as well as how well their supervisors understood their problems and encouraged them to meet their potential. It also asked how much confidence they had in management decisions that affected them.

A second survey six months later asked them how well management was meeting their expectations and living up to promises they believed had been made about what they would receive for their efforts on the job.

Employees who rated their employers least favourably on the first survey consistently ranked their own levels of anger, frustration and sense of betrayal higher in the follow-up survey than those who had given their employers high support ratings.

The disgruntled employees were also most likely to rank their commitment to their company lower and were also most likely to say they intended to look for another job.

"The study provides strong evidence that people in good working relationships will perceive a breach of their expectations with ...the complacency implied by the saying that 'love is blind,' while those in a bad work relationship will react with the fury of a lover scorned," says Sandra Robinson, a professor at the University of British Columbia's Sauder School of Business, who has studied psychological contracts extensively.

"Particularly in this economy, not consistently demonstrating trust and commitment is a recipe for increased turbulence, while a high level of trust can smooth out a rough ride," she adds.

There are implications for tough times, Prof Robinson says. "In a layoff, for example, the highly trusting employee is going to say the company wouldn't do this if they didn't have to." But employees who lack trust are more likely to feel they are being short-changed, even if they are survivors, she says.

This is likely to lead to all sorts of negatives at work: time wasted while complaining to fellow employees, a decline in productivity, and even increased theft or sabotage of company property, she says.

Bad relationships tend to show up most often in companies that have had continuing histories of inconsistent policies, labour unrest, regular policy changes and discipline issues, Prof. Robinson says.

She adds that positive relationships must be built over the long term. But even employers with a bad track record can turn things around in the short term.

Open communication and demonstrations of support are key. Consistency and honesty are important elements as well.

"Even in the best relationships, whether in love or on the job, there are limits to what people will tolerate. The most loyal employees will feel betrayed if they suddenly find evidence that their trust was misguided," Prof. Robinson warns. "If you tell them the actions were necessary for the company's survival and to protect their jobs and they find that the cuts were arbitrary or you had lied to them about how decisions were made, even the most loyal employees will react with rage."

Organizations that have been building good relationships with employees all along are in the best position to retain staff and emerge in good shape from the current downturn, Prof Robinson says.

"But it's never too late to build good relationships."