Should We Raise the Minimum Wage?

Minimum WageLast week, Americans enjoyed a three-day weekend in honor of the country's working class and their contributions to our nation. Many people fired up barbeques while President Obama tried to light a fire of support for raising the federal minimum wage, saying that "America deserves a raise."

The President's address came just a few days before Michigan's increased minimum wage took effect on September 1. Governor Rick Snyder signed legislation back in May that would raise the minimum wage to $9.25 an hour by 2018. Last week was the first in a number of gradual increases that raised the wage from $7.40 to $8.15 an hour. Michigan joins 13 other states that have raised wages in 2014, including California, Connecticut, Delaware, Maryland, Minnesota, and others. The minimum wage debate continues to sweep across other states and be both applauded as a measure that will expand the pillar of the middle class and criticized as economic folly that will eliminate jobs and actually hurt the low-wage workers it aims to help.

President Obama has pushed for a federal minimum wage increase from $7.25 to $10.10 an hour; however, Congress has shelved the initiative and it is unlikely that any legislation to raise the federal wage will be passed in the near future. But the heated debate still makes headlines as states and cities raise minimum wage requirements. In 2014, 38 states introduced some kind of minimum wage bill (National Conference of State Legislatures, 9/2/14).

Arguments advocating and condemning a higher federal wage all focus on one thing: the economy. Will employers cut jobs because of the higher cost of paying workers? Or will a higher wage mean increased spending and a boosted economy?

Industries Earning Minimum WageWhat will happen to jobs?

Earlier this year, the Congressional Budget Office (CBO) released a report that predicted that if the federal wage were raised to $10.10 an hour, the economy would lose 500,000 jobs (Congressional Budget Office, 02/2014). Opponents of this increase point to what happened in 2009, when the minimum wage was raised and the economy lost 600,000 jobs in the following six months - even while the economy was growing at 4%. When jobs are eliminated, low-skilled workers are more adversely affected, as their jobs are the ones lost and they have a harder time finding employment.

On the other hand, proponents of raising the wage argue that those states who introduced higher minimum wages in 2014 have actually added jobs at a faster growth rate than those who did not. The 13 states who boosted wages added jobs at 0.85%, while those states that did not raise their minimum wages grew at a rate of only 0.61%.

Will it help or hurt the economy?

Although the federal wage was raised in 2009, advocates of raising the wage again point out that inflation has eaten away at the previous bump's real value, which has slipped back to where it was in 1998. Additionally, a wage hike to $10.10 would lift workers out of poverty. The CBO predicts that 900,000 workers would be lifted above the poverty line and wages would be increased for 16.5 million workers. Other research forecasts even more positive expectations, estimating that 4.6 million people would be lifted out of poverty (Minimum Wages and the Distribution of Family Incomes," 12/2013). Critics are quick to point out that raising 900,000 out of poverty out of a total of 45 million does little solve the problem of poverty as a whole.

Furthermore, raising the wage will act as a stimulus and boost consumer spending, according to supporters. Opponents counter that any money used to increase wages must be passed on either to the business, resulting in lost jobs, or to the customer, resulting in higher prices. Additionally, there are no guarantees that an increase in wages would go directly into the economy or toward businesses.

Politicians, businesses, and other leaders have been drawn into the battle surrounding the minimum wage. Recently, Gap Inc.'s CEO Glenn Murphy decided to raise the wage for 65,000 of its workers to $10 an hour by June 2015. Murphy said that the move was not political or tied to any side of the debate but was motivated by Gap's commitment to "invest in front-line employees." Regardless of whether the company wanted to join the national discussion, they are now part of it; President Obama applauded the company and urged other businesses to use them as an example and work to raise wages for their employees in the absence of a higher federal wage.

Readers, do you think the federal minimum wage should be raised?

August 2014 Jobs Report

The U.S. economy added 142,000 jobs in August while the unemployment rate decreased slightly to 6.1%, according to the Bureau of Labor Statistics' Employment Situation Summary. The number of long-term unemployed persons declined by 192,000 to 3.0 million and accounted for 31.2% of the total unemployed.

Major industries with gains in August included professional and business services (+47,000), health care (+34,000), food and drinking places (+22,000), and construction (+20,000). Temporary help employment increased 2.4% from July and 7.9% year over year.

Despite the downward tick in the unemployment rate, August posted the smallest job gain in eight months. Average hourly pay rose six cents to $24.53.

Stop Rewarding Overwork

WorkaholicTwelve-hour days, 7 days a week... Sound like your office? Actually, it's the environment during the Industrial Revolution. Harsh working conditions during that era incited protests and rallies that led to safer working environments, more manageable hours, and the induction of Labor Day, the "working person's holiday" that we celebrated this week. It commemorates blue-collar laborers and their contribution to the country. Increasingly however, America is shifting to a white-collar workforce. In 1970, a quarter of U.S. workers held a manufacturing job (Business Week, 4/28/14), but now only 8.2% work in manufacturing (Bureau of Labor Statistics, 12/13).

Comparing conditions during the Industrial Revolution to today's work environment is admittedly a stretch; children no longer labor in factories, and work environments are much safer and more regulated. However, the lines between work and leisure have been become blurred in ways never experienced before. Technology makes workers available 24/7, and success has become tied to the amount of hours that someone works. The highest earners in the U.S. work 60-80 hours a week (Quartz, 9/13/13), equaling around 3,430 hours a year, much higher than the average 1,700 hours of other Americans.

But does working more actually make someone a better worker or more qualified to succeed? Some companies are not convinced. Netflix outlined their company culture in a widely disseminated document; the company asserts that "hard work is not relevant" and "sustained A-level performance, despite minimal effort, is rewarded with more responsibility and greater pay." Netflix doesn't reward or promote employees for the amount of time they spend at the office. Managers should take a cue from Netflix and do everything within their power to stop creating a work environment that values overwork, unnecessary stress, and unlimited connectivity to their jobs.

Woman Working LateFirst, managers should understand that overwork is about culture, not about rules. For instance, Wall Street companies like Merrill Lynch and Goldman Sachs are infamous for their harrowing hours, all-nighters, and working weekends. But the companies do not have written rules that tell junior bankers to spend nearly every waking moment in the office. There are no policies requiring that they come in on Saturday and Sunday or work through the night, but the cultural expectation is that they should and will.

One of the hardest things for managers to understand is that rather than monitoring hours, they should be monitoring results. Companies with cultures like Netflix don't require employees to spend a certain number of hours in the office; instead they look at what the employee produces. Netflix isn't concerned about clocking in specific hours; they'd rather focus on the quality of your work, your ability to improve and innovate, and whether you're the type of person who is going to "pick up trash lying on the floor."

Finally, employees who don't fit or don't perform should not be part of your team. A member who doesn't pull their weight will put a larger burden on your top-notch people, making them feel overworked and resentful. Someone who operates better with schedule stability and regulated hours probably won't function well with freedom and flexibility. Netflix offers people who are bad fits or bad performers a generous severance package but commits to moving them out of the organization so that someone who does fit can fill the spot.

In a world that increasingly values, and even reveres, long hours, managers should take a second look at whether that culture is as successful as previously thought. Quantity does not always equal quality, and in many cases, managers should sever the connection between overwork and rewards.

Readers, do you feel overworked? Are long hours rewarded at your workplace?

Tax Inversions: Shady or Savvy?

Burger KingAs their long-time slogan states, Burger King wants you to "have it your way." Well, Burger King also wants it their way, according to some critics of the American fast food company's move to relocate their headquarters to Canada in order to take advantage of lower corporate tax rates.

On August 24, Burger King confirmed that it is in talks to merge with Tim Hortons, the Canadian coffee and donut chain, and move their headquarters across the border (Yahoo Finance, 8/24/14). Such deals, referred to as "tax inversions," consist of American companies buying foreign firms in order to move their headquarters to a lower-taxed country.

Tim HortonsBurger King is not the first company to consider this kind of deal; so far in 2014, nine tax inversion transactions have taken place, the most in any one year (Reuters, 8/25/14). But the Burger King merger is unique. Most past deals have involved companies buying much smaller foreign corporations. However, the iconic American chain and Tim Hortons are similarly sized; Burger King has a market capitalization of $9.6 billion while the Canadian company has $8.4 billion (Forbes, 8/24/14). Additionally, most companies that have struck deals are medical device companies like AbbVie or MedTronic, not an American household name seen on street corners all over the country (The New York Times, 8/24/14).

America has one of the highest corporate tax rates in the industrialized world at 35%, and when combined with state taxes, that number reaches 39% (Forbes, 8/25/14). If Burger King moves their headquarters to Canada, they'd benefit from the second-lowest tax rate in the G-7 at 15% (Forbes, 8/24/14). Ireland, which has a tax rate of 12.5%, has also become a common country for American companies to relocate to in tax inversion deals.

Businesses also consider tax inversions because it allows them to bypass paying taxes to the United States on their worldwide profits. Most nations employ a territorial tax system, which means that income is only taxed when it's earned domestically. However, America's tax structure is a mix of both a territorial and worldwide system, meaning all income is taxed, regardless of whether or not it was earned inside the country. For instance, if a U.S.-based company sold products or services abroad, they would pay the taxes of the foreign country as well as taxes from domestic sales.

Tax inversions have started a heated debate between proponents and critics. Supporters insist that tax inversions allow American companies to stay competitive and profitable in the American worldwide system and amid high corporate tax rates. Contrary to accusations, proponents claim there is nothing "unpatriotic" or "unethical" about cutting costs to run your business. Rather than shaming companies that are trying to increase profits, America should focus on revising the tax system and lowering the statutory corporate tax rate to help companies remain competitive.

Corporate greedMeanwhile, opponents blast the deals, saying they are motivated by unveiled greed that passes on costs to individuals and small businesses. While those businesses are technically based in a foreign country with more attractive corporate tax rates, they can still take advantage of the conditions that make America a positive environment to conduct business, such as the American educational system, R&D capabilities, innovative culture, and a skilled workforce. Critics also argue that tax inverted corporations put a greater burden on small businesses and individuals to maintain the country's infrastructure, national defense, and education, all of which corporations benefit from and depend on (The Washington Post, 7/27/14). Finally, while acknowledging that the nation does have one of the highest corporate taxes of industrialized countries, opponents claim that most companies avoid paying the full tax rate by applying tax credits, subsidies, loopholes, offshore tax havens, and a long list of other accounting tricks that reduce many multinationals' tax rate considerably, sometimes to as low as 10% (Citizens for Tax Justice, 5/19/14). President Obama himself called these companies "corporate deserters."

Meanwhile, the Joint Commission on Taxation estimates that the United States could lose about $19.5 billion in corporate taxes over a decade from tax inversions (The Wall Street Journal, 7/14/14). Time will tell whether this practice will help or hurt American business and the economy.

Readers, what do you think? Are tax inversions just good business tactics or a shady strategy for profit? Comment and let us know!

Learn from the #IceBucketChallenge and Build Extraordinary Teams

These days, it's difficult to be unaware of the trending #IceBucketChallenge. Facebook, Twitter, and mainstream news feeds are all filled with videos of people dumping buckets of ice water over their head. Although in some sweltering cities an ice bath may be refreshing, celebrities, actors, sports stars, politicians, CEOs, and millions of other ordinary folks are not joining the viral sensation simply to cool off.

The Ice Bucket Challenge is a fundraising campaign for the ALS Association, an organization that supports research for a cure to ALS (Amyotrophic Lateral Sclerosis), more commonly known as Lou Gehrig's disease. The challenge is simple: Take a video of you dumping a bucket of freezing cold ice water on yourself to raise awareness of the illness and then challenge three other people to do the same. They then have 24 hours to drench themselves. The campaign became an Internet sensation and, as of this week, has raised well over $30 million dollars and shows no sign of slowing (

The challenge actually started with no connection to ALS. Those who joined in initially donated to any charity or organization of their choosing. The campaign became a viral sensation linked to curing Lou Gehrig's disease when Pete Frates, a former college baseball player who has the illness, challenged his friends to the Ice Bucket Challenge. The campaign quickly spread through Frates' network of supporters and the entire Boston area, multiplying exponentially across the country (New York Times, 8/17/14).

The viral sensation has not overlooked businesses. CEOs, executives, and founders of the some of the biggest global companies have participated. Bill Gates, Tim Cook, Mark Zuckerberg, Jeff Weiner, Oprah Winfrey, Sheryl Sandberg, Satya Nadella, Jeff Bezos, Dick Costolo, and dozens of others have drenched themselves and given generously to ALS. Why are so many business giants jumping on the #IceBucketChallenge band wagon? Because this viral campaign can teach leaders how to build extraordinary teams that not only get things done, but actually get along.

First of all, the challenge is fun. Millions of people wouldn't be participating if it weren't. It's entertaining to see people shiver, gasp, and squeal as they douse themselves in ice water. Take a look at Oprah Winfrey's challenge and try not to smile; or check out Bill Gates' video with a specially designed contraption just to soak himself. If you want to build a team that's going to stay together, let them play together . Check out "Job Talk with Anita Clew," our sister blog, for advice and ideas on how to let your teams have a little fun.

The #IceBucketChallenge has a purpose. Yes, being flooded in freezing ice water is amusing, but ultimately the campaign went viral after it was linked to curing Lou Gehrig's disease and spurred many people to raise awareness of the illness and donate to the ALS Association. The most successful teams understand their common purpose and goal. You must be sure that every single person can identify not just what they are working on, but why they are coming together and what they are working toward.

A key part of the challenge is paying it forward and calling out others to take on the dousing. Your team also needs this kind of grassroots camaraderie. A manager who commands and controls might get the bare minimum done, but group members challenging and supporting each other will elevate your team to a higher level.

Finally, great teams understand that the challenge never really ends, even if the goals are met. The ALS Association of course considers their campaign a success. But their wild victory now brings around new questions and challenges. ALS only earned $1.9 million in the same fundraising period last year. Now they've raised $30 million and counting. ALS has to decide where the money will go and how they're going to move forward. Teams must understand that even success brings its own set of challenges, which must then be met with the same enthusiasm and energy as the original cause.

Readers, have you participated in the #IceBucketChallenge? How can you apply it to team building at your company?

It’s Your First Day as Manager, Now What?

Most managers are promoted on a Friday and come in to work Monday morning not quite sure how to begin their new role. They want to gain the respect of their team and earn credibility, but they don't know what it means to "be the boss."

You won't gain total credibility on your first day as a new manager. But you can set the tone for the kind of manager you're going to be. Unfortunately, navigating your new role will probably fall mostly upon you; only 12% of organizations have formal management training programs and about 58% of new managers feel unprepared in their new role (TLNT, 04/1/14). But there are decisions you can make on your very first day that will lend you respect immediately and set your trajectory toward trust and credibility.

  1. Schedule time to talk one-on-one with your new team members.
    You won't be able to actually sit down with all of your team members on your first day, but you should reach out to each individually and get a one-on-one meeting scheduled. You might have lots of ideas for improvement, initiatives, and programs, but this is the not the time or place for those. Instead, come prepared with a list of questions for the employee about what they need to their job well, the challenges they face, their goals, and most importantly what they expect from you as a manager. This is a time for you to listen, not to talk.
  2. Establish a reporting system with your superiors.
    The best way to earn the trust of those above you is by making decisions every day that build on one another and create a reputation of competence. That won't happen on day one, but you can determine how you'll be keeping your superiors in the loop about any results, progress, or important updates for your team. Ask your direct supervisor the best way to keep upper management informed. If there is already system established, make sure you memorize it inside and out.
  3. Make a list of 3s.
    You need to come at your new role with a new mindset. You're no longer an individual contributor. You have to think more about how your team fits into the company two to five years from now, not just what you have to do today. As you examine your department with new eyes, write down a list of 3 positive things about your division. Maybe you flawlessly follow up with customers or perhaps you all get along and there is no gossip or drama. Then write down 3 things that you know must change or improve in order for your department to survive.

You create a positive reputation by incrementally proving you can be trusted. Decisions you make every day build on one another and those decisions start on your first day as a manager.

Things may be a little trickier when you've been promoted to your new position and will be managing former peers. Read what our sister blog, Job Talk with Anita Clew, has to say in "Becoming the Boss: Advice for New Managers" (, 11/27/12).

Readers, what did you do on your first day as a manager?

Giving Employees Feedback They Don’t Want to Hear

Are there employees on your team who need some tough feedback, but you dread the conversation so much you avoid it? You know who these people are. Maybe they wear inappropriate clothing to work. They might text constantly during meetings. Or regularly show up late. Perhaps they sport a snotty attitude. They may even lack personal hygiene.

Employees want feedback from their managers; 57% of them even want the negative feedback you have to give (Harvard Business Review, 01/2014). However, though they might want to hear how to improve a process or do their job more efficiently, calling out their bad attitude or confronting their unsuitable clothing choices is not always welcome.

The reality is, unless you decide to address the behavior and set different expectations, the situation will stay the same. Someone who shows up late every day will not suddenly start coming in on time. Your team member who slacks off will not magically become a star performer. And the person who doesn't meet the dress code standards will not just suit up one day.

Giving employees the feedback they don't want to hear does not have to make you queasy. Instead, if you directly address the issue while always keeping respect at the forefront of the conversation, you can talk about even the most awkward and difficult situations.

  1. Introduce the conversation. Ask the employee for a chunk of their time to talk. It doesn't have to be elaborate; a short and sweet: "Hey do you have two minutes? There's something I'd like to talk to you about" is ideal. You should always give your employee the respect of privacy and never have these kinds of conversations in front of others.
  2. State what you've observed. Lead with "I've noticed..." or "Lately I've seen..." and then describe the employee's specific behaviors. "Having a bad attitude" is not specific enough. You need to focus on what the employee is actually doing or saying. Then, outline the impact of their behavior on the employee themselves, on their coworkers, or on the company. "I've noticed that you came in an hour late three times this week. It's made it difficult for us to meet our deadlines and puts a larger burden on your teammates."
  3. Ask for their opinion about the situation. The employees are going to have a gut emotional reaction, and you should expect this. They might be angry, defensive, fearful, surprised, or hurt. This is natural; embrace it and let them explain themselves. You asked for their opinion, so let them provide it. Their emotions might come out, but you should always leave your own emotions at the door.
  4. Ask permission to make a request or suggestion. Asking for permission shows your employees respect and gets their buy-in for what you suggest. When you've outlined your thoughts, always get some verbal confirmation that they understand you. "I suggest that from now on we make our staff meetings technology-free so that we can keep them productive. Would you be willing to do that?" You might receive some pushback. "What if there's a client emergency during the meeting? How will I know about it if I don't have my phone?" The best response to any resistance is to ask the employee how they would move forward if they're not pleased with your own suggestion.
  5. End by thanking the employee for their time. Then, emphasize that he or she is a valued and important part of your team.

These five steps should only take 2-3 minutes total, and all feedback should be given in as timely a manner as possible; if your employee texted during an entire staff meeting on Monday, don't wait until to Friday to address it.

You may need to have more than one conversation about an employee's behavior. If there is no improvement, then you should recap the changes you agreed to together. And don't forget to keep affirming the person as the situation gets better. "Hey, I've noticed that you were in at 8 am everyday this week. I really appreciate the effort, and it's reflected in our deadlines too. We're ahead of schedule this week."

Managers, what is the top issue you fear addressing with your employees?

July 2014 Jobs Report

The U.S. economy added 209,000 jobs in July while the unemployment rate rose slightly to 6.2%, according to the Bureau of Labor Statistics' Employment Situation Summary. The number of long-term unemployed persons remained little changed 3.2 million and accounted for 32.9% of the total unemployed.

Major industries with gains in July included professional and business services (+47,000), manufacturing (+28,000), retail (+27,000), and construction (+22,000). Temporary help services decreased by 33,600 in July, a typical pattern due in part the Independence Day holiday.

Manufacturing added 28,000 jobs in July, making it the industry with the second-highest job growth. Most gains occurred in motor vehicles and parts and furniture-related products. Over the prior 12 months, manufacturing has added an average of 12,000 jobs per month, primarily in durable goods industries. Other industries, such as leisure and hospitality, transportation and warehousing, information, financial activities, and government changed very little during the month of July.

7 Management Lessons from Kickstarter

The Coolest Cooler In 2009, Kickstarter began a crowd funding site that not only provided aspiring entrepreneurs a forum to introduce their ideas to the world, but also allowed everyone else to become investors and support projects that interested them. Since then, over 66,000 independent projects have been created and individuals have given more than $1 billion to various Kickstarter campaigns (Kickstarter, About Us).

This summer, one campaign skyrocketed to success and is on track to break the record for the most funded campaign in Kickstarter's history (OregoneLive, 7/10/14). What idea inspired thousands of people to freely invest their hard-earned cash? A product that promises to upgrade the summertime staple of the cooler: "The Coolest." Coolest was a campaign started by Ryan Grepper who hoped to raise $50,000; Grepper surpassed his fundraising goal and now has over $7.5 million and nearly a month left on his campaign to go even higher (Kickstarter, Coolest Cooler). Kicktraq, which tracks the trends of campaigns, estimates that Coolest will raise around $19 million (Kicktraq).

Grepper wanted to reinvent a product that he thought needed a 21st-century makeover. His upgraded cooler includes a built-in battery-powered blender, waterproof speakers that play music via Bluetooth, a USB charging station, and numerous other perks. He rapidly gained the support of thousands of people, some of whom have pledged up to $2,000.

Grepper's is a "cool" success story to be sure, but there are valuable management lessons to review as well -- about how people decide what (and who) they'll invest their time, energy, and resources supporting.

Lesson 1: People will pledge loyalty (and take risks), but only for what they believe in.
Investors voluntarily fund Kickstarter campaigns because they believe in the project. Campaigns fund future product development, so people might invest thousands of dollars without the guarantee that the project will be completed. Investors are willing to take the risk because of their faith in the idea and the creators of the campaign. What your company produces or does should inspire the same kind of loyalty in your employees. Your staff might not be investing money, but they are investing time and energy. If they believe in what they're working toward, you'll discover unbelievable dedication.

Clear Vision and Measured GoalsLesson 2: You'll never win commitment without a clear vision and measured goals.
Successful Kickstarter campaigns specifically outline their vision, goals, and how they plan to achieve the promised results. Grepper presented his vision and outlined the engineering, manufacturing, and delivery schedule to his investors. If you want your employees to invest themselves, you first have to answer the question: Why should your employees care about what your company does and their role in the process? But it's not enough to stop there. You also need to outline the mutual goals and the steps needed to reach each one.

Lesson 3: You need to reward investment. But it doesn't have to be about money.
The Coolest offers tiered rewards for its investors, but these weren't always incentives that have to do with money. One reward for investment is having your name immortalized on Grepper's own Coolest. Grepper also offers one-on-one feedback sessions to discuss investors' own innovative ideas. As a manager, you can't ask for people's time, energy, and resources without also committing to reward their dedication. Think of compelling incentives for your employees -- and just like The Coolest, these incentives don't have to be expensive.

Lesson 4: Be honest about the challenges ahead.
The Coolest only exists today as a prototype. Grepper understood that the biggest hurdles to producing his idea would be manufacturing, product adjustments, and fulfillment. Your team's goals are going to encounter obstacles; anticipate and plan for them, while addressing them openly and transparently.

Active ParticipationLesson 5: Actively encourage questions, ideas, and participation.
Grepper encouraged questions and insights into his product. When investors asked about the location of his manufacturing, the use of recycled materials, the power of the battery in the blender, Grepper addressed their concerns. When he was able to add color options, Grepper had investors vote for their favorite choices. When one investor suggested installing a solar panel as an energy source, Grepper responded to the idea. Get your people involved and ask for their opinions; you never know who might have the next great idea tucked away in their brain.

Lesson 6: Celebrate when goals are met and continually stretch further.
The Coolest reached its first fundraising goal within 36 hours of the start of its campaign. But Grepper's success didn't make him complacent. As more money was raised, Grepper added color options, the possibility of a solar panel, and the guarantee of a one-year warranty for the product. When goals are met, celebrate and reward your team, but don't let the growth stop there. Continually look for areas of improvement and ways to innovate.

Don't Give UpLesson 7: Don't give up.
Grepper first launched his Coolest campaign in 2013, but his first attempt failed, and he did not reach his funding goal. But with a new design, new marketing tactics, and campaigning in the summer versus the winter, Grepper soared above and beyond his original goal and is on track to be the highest-funded Kickstarter campaign to date. Don't let failure deter you. Instead, let mistakes and hindrances teach you lessons about how to succeed the next time around.

Readers: Which of these lessons resonates with you the most? How can you start applying it to your own team?

Would You Risk Being Fired for Your CEO?

Market Basket employees protest their CEO's dismissal Last week, eight employees of Market Basket, a Boston-based grocery chain, were fired for protesting the ousting of their CEO, Arthur T. Demoulas. Demoulas was fired and removed from the company's board in June after an internal dispute. Over the weekend, more than 2,500 of Market Basket's employees protested the decision (Business Insider, 7/21/14), and other employees working at Market Basket's warehouse refused to deliver goods as a form of dissent until Demoulas was reinstated ( 7/21/14).

Why would Market Basket employees risk their livelihoods for their CEO? Employees' trust in Demoulas' leadership propelled their support for him, even if it meant losing their jobs. Staff at Market Basket receive strong benefits, including a profit-sharing program, and historically the company has promoted from within and rewarded hard work and longevity ( 7/21/14). Employees' positive experiences and high regard for Demoulas stemmed from their confidence in his decisions and leadership. Trust in an organization comes down to whether an employee feels they can rely on their managers. Market Basket workers were so certain they could rely on Demoulas as a leader that they risked losing their jobs to keep him as their CEO.

Elsewhere, only 43% of employees trust their CEO and only one in five people trust their business leaders to make ethical decisions (Edelman Trust Barometer, 2014). Basic trust in CEOs is rare, making this kind of public support almost unheard of. But why is this kind of faith in an organizational leader so uncommon? Most employees don't feel as if their work is recognized or that they have opportunities to grow. Only 49% of employees are satisfied with the growth and development opportunities, and only 47% are satisfied with their companies' recognition practices. Workers report having more trust in their company when the organization acknowledges employee contributions, provides opportunities for involvement, and communicates effectively (American Psychological Association, 4/23/14).

Trust is not just influenced by executives or the C-suite. Any Manager can create an impact and foster an environment of trust by following a few simple trust principles:

  1. Your team is more likely to trust you if you first extend trust to them. You can't expect anyone to trust you if you refuse to put your confidence their performance, results, and integrity.
  2. Don't keep your employees in the dark. Share critical information with them in a timely manner. Make sure your team has the knowledge they need to effectively perform their job.
  3. Pay attention and recognize good work. Don't ever assume your employees know intuitively they are doing a good job. Observe their accomplishment and recognize them... publicly. (Conversely, if you need to provide critical feedback, do that behind closed doors.)

The Market Basket employees' loyalty to Demoulas became national news because trust in leaders has become a rare sentiment. If other organizations want to garner similar loyalty, they'll first need to establish organizational trust.

Readers, do you trust the company you work for? How would you rate your trust on a scale of 1-5 (5 being high level of trust)?

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