Science has unlocked the mystery of creating and maintaining high-performance teams—trust.
There is a common assumption that employees under stress equates to peak performance. High-pressure, low-trust organizations fail to recognize the hidden costs incurred as a result.
The reality of workplace stress is low engagement, low productivity, and high healthcare costs. Engagement—which correlates to feelings of value, security, support, and respect—is often inversely related to a cut-throat environment.
Working cultures rooted in fear appear to drive engagement and sometimes excitement. However, research suggests inevitable stress that likely leads to disengagement long term.
One study showed that employees ranked lower in a hierarchy have higher chances of cardiovascular disease and death from heart attacks. Stress-producing bosses are literally bad for the heart!
In studies by the Queens School of Business and the Gallup Organization, companies with disengaged workers report:
- 37% higher absenteeism
- 49% more accidents
- 60% more errors and defects
- 18% lower productivity
- 16% lower profitability
- 37% lower job growth
- 65% lower share price over time
Loyalty cost. Recruiting, hiring, and training are costly for any organization. In fact, the Center for American Progress estimates replacing one employee costs 20% of that employee’s salary. However, the financial impact of high turnover rates is much more significant. High workplace stress triggers nearly a 50% increase in voluntary turnover. Employees tend to decline promotions, and the organization experiences both decreased productivity and loss of subject-matter expertise.
Neuroscience for the Win. Paul J. Zak, the founding director of the Center for Neuroeconomics Studies at Claremont Graduate University, is the author of Trust Factor: The Science of Creating High-Performance Companies. “Back in 2001,” he says, “I derived a mathematical relationship between trust and economic performance. This research described the social, legal, and economic environments that cause differences in trust.”
Zak knew that, in rodents, a brain chemical called oxytocin can signal another animal that it is safe to approach. His subsequent research proves that, in humans, too, oxytocin appears to do just one thing: reduce the fear of trusting a stranger.
Problem: Leaders are aware that low employee engagement = lost value.
Solution: Neuroscience. Foster organizational trust, in turn to stimulating production of oxytocin.
Payoff: Creating a culture of trust increases oxytocin, which improves workforce productivity, energy levels, collaboration, happiness, and loyalty.
Research proves that companies with a high level of trust report:
- 50% higher productivity
- 13% fewer sick days
- 76% more engagement
- 106% more energy at work
- 74% less stress
- 29% more satisfaction with their lives
- 40% less burnout
The effect of trust in workplace performance clearly is powerful. One more surprising thing—high-trust companies pay more. Employees earn an additional $6,450 a year (17% more) at companies in the highest quartile of trust, compared with those in the lowest quartile. In order to make this possible in a competitive labor market, employees in high-trust companies must be more productive and innovative.
Space Matters — Mashore Perspective
PWC reports that 55% of CEOs think that a lack of trust is a threat to their organization’s growth. Most have done little to increase trust, though, mainly because they are not sure where to start.
Culture is typically structured in an ad hoc way and framed around random perks, such as gourmet meals or “Karaoke Fridays.” Many companies also offer a wide variety of perks, from working at home, to in-office leisure and workout facilities.
Despite the evidence that you can’t buy higher job satisfaction, organizations still use compensation “golden handcuffs” to keep good employees in place. These companies fail to take into account important research. While such efforts might boost workplace happiness in the short term, they fail to have any lasting effect on talent retention or performance.
So, note to CEO: Employees prefer workplace well-being to material benefits. This well-being stems from one place, and one place only—a positive culture. Perhaps begin with these steps:
1. Recognize excellence.
Neuroscience shows that recognition has the largest effect on trust when it occurs under the following circumstances: Immediately after a goal has been met; When it comes from peers; and When it’s tangible, unexpected, personal, and public.
Space Matters: Your space should enable excellence to be recognized on an ongoing basis.
2. Give employees discretion in how they do their work.
Being trusted to figure things out is a big motivator. A 2014 Citigroup and LinkedIn survey found that nearly half of employees would give up a 20% raise for greater control over how they work.
Autonomy also promotes innovation, because different people try different approaches. Younger or less-experienced employees will often be your chief innovators, since they are less constrained by what “usually” works.
Space Matters: Your space should allow work flexibility and mobility.
3. Share information broadly.
Only 40% of employees report that they are well-informed about company goals, strategies, and tactics. This uncertainty leads to chronic stress, which inhibits the release of oxytocin and undermines teamwork.
Openness is the antidote. Ongoing communication is key. A 2015 study of 2.5 million manager-led teams in 195 countries found that workforce engagement improved when supervisors had some form of daily communication with direct reports.
Space Matters: Your space should facilitate easy communication through visibility, large and small meeting areas, light, and your technological platform.
4. Intentionally build relationships.
When employees intentionally build social ties at work, their performance improves, according to Neuroscience research. A Google study similarly found that managers who “express interest in and concern for team members’ success and personal well-being” outperform others in terms of quality and quantity of work.
Proof: Even engineers need to socialize. A study of software engineers in Silicon Valley found that those who connected with and supported others, not only earned the respect and trust of peers, but were also more productive themselves.
Space Matters: Your space should have ample areas—kitchens, lounges, libraries, rooftops—for informal engagement and spontaneous connection.
5. Induce “challenge stress”.
Harvard Business School’s Teresa Amabile researched the power of progress. She found that 76% of people reported their best days involved making progress toward goals
When managers assign teams a difficult but achievable job, the moderate stress of the task releases neurochemicals, including oxytocin and adrenocorticotropin. These neurochemicals intensify focus and strengthen social connections, resulting in efficient behavior coordination.
Space Matters: Your space should adequately support your team. Whether working independently or collaboratively, one needs the right tools for the job, including a work space.
“It is mutual trust, even more than mutual interest, that holds human associations together.” —H. L. Mencken