Britain's managers must improve how they communicate with their employees in order to encourage confidence in their decisions.
Research by the Institute of Personnel and Development (CIPD) revealed that confidence in managers has dropped to its lowest levels since the organisation began recording the data two years ago.
The CIPD's winter survey found that confidence in senior leaders has fallen four points to -1 from +3, while trust has dropped from -2 to -8, which the organisation claims is a result of the current economic climate.
Employee confidence in their senior leaders has been significantly affected by tough management decisions such as large scale redundancies, salary freezes and business restructuring.
Claire McCartney, CIPD resourcing and talent adviser, said that managers must clearly explain to their staff about any major changes that have been made because of the recession.
Employees should be consulted and involved whenever serious changes like restructuring or redundancies are being considered as this will make management decisions more transparent and improve trust and confidence.
Ms McCartney said: "Evidence suggests that where employees benefit from effective communication and feel their views matter, and are taken into account before decisions are made, they are more likely to remain engaged in their work and committed to the organisation."
Regular consultation with staff members is crucial to understanding any issues that employees may be experiencing such as job satisfaction and security concerns, which are more prevalent in these tough economic times.
Improving employee morale is essential in the current economic climate as high job satisfaction levels is likely to result in increased productivity and better customer service.
Workers that are dissatisfied with the performance of their current managers are likely to seek employment elsewhere when the economy recovers and this could be with a company's competitors.
The CIPD found that the percentage of staff who were actively seeking a new job increased from 19 per cent to 24 per cent in the previous quarter, which could spell bad news for business with underperforming managers.
Companies which are looking to improve business performance should employ the services of management consultants as they can apply proven business theory to help them examine their organisational processes.
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Systems thinking theory allows a business to view their organisation from their customer's perspective and this can help them improve performance and eliminate waste at all levels of the company.
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