All companies want and need to communicate with their employees. It’s well established that the engaged employee is happier, healthier, and more creative, has better job performance and is less likely to leave.

[Blog: 7 Easy Tips to Build Employee Engagement with Digital Signage]

I was reminded about the role that trust has in workplace communications while reading the book The Hard Thing About Hard Things, by Ben Horowitz (which I recommend to managers). Horowitz recounts many of the ups and downs in running a business and what he’s learned from them. Over the years there were several threats to his businesses’ survival and he found out the way he communicated about them to employees was key to fixing – or not fixing – them. The first time around he tried to postpone telling employees what was going on, but then the inevitable layoff happened. This had negative repercussions with everyone because they worried about their job security. He learned that being transparent about problems and potential solutions made employees feel included and less worried.

Building Trust in Employees

To make this work successfully, the manager or company has to have a certain amount of trust built up so employees will actually believe what they’re saying. You can see how this dynamic works with the following thought experiment. If you ran into Warren Buffet and he gave you advice on where to invest $1,000, you’d be likely to follow his direction. But if a broker cold-called you on the phone and gave you the exact same advice, you’d probably ignore it. Here you have identical information but different levels of trust.

Most managers are somewhere in the middle of this employee-trust spectrum. The more trust that exists, the easier it is to communicate quickly and effectively with your employees with good results. When it comes to building trust in the workplace, it includes communicating good and bad news on a timely basis.

Establishing Employee Trust

If a manager doesn’t have a good level of trust established, then there’s a lot of trust debt to overcome and employees probably aren’t listening. That adds to the challenge but can be overcome with regular, transparent communication efforts. Even if this is the situation, it’s worth pursuing because as Horowitz states in his book, “As a company grows, its biggest challenge always becomes communication. Keeping a huge number of people on the same page executing the same goals is never easy.”