The Difference Between Fear-Based and Trust-Based Workplace Cultures
Tone at the Top Defines Ethical Culture in the Workplace

Creating a Trust-Based Culture in the Workplace

Psychological Safety Promotes Trust Where Employees Feel Safe Speaking Out

What is Corporate Culture? The culture of an organization says a lot about what it stands for. Organizations that commit to ethical decision-making tend to instill a culture that promotes doing the right thing regardless of the cost. They view decision-making from a long-term perspective. Such organizations do not make decisions based on expediency. They do so after careful deliberation about the potential consequences of their actions on stakeholders; whether they are meeting their obligations to customers, clients, employees and so on; and whether their actions match their values. In other words, the leaders of the organization should “walk the talk” of ethics.

A trust-based culture promotes cooperation and being a team player. It means to have a welcoming culture for those who play by the rules. It provides a meaningful outlet to report matters of concern including whistleblowing. It shuns retaliation for such actions and, instead, it promotes acting in accordance with the public trust.

There are many characteristic behaviors of a trust-based culture. The most important is integrity. Organizations should act on principle not expedience. They need to not only say something is wrong but act in a way that shows why it is wrong. Employees should be held to high standards of behavior and so should management. Managers have to walk the talk of ethics. They must set an ethical tone at the top.

Trust is not only an act of confidence in someone but a responsibility on the part of the person whom others rely on. Trust is not maintained only by commitment to a strong character, but by how a manager directs relationships to others who are evaluating, interpreting, and depending on their actions.

There are what’s known as the “3 C’s of Trust" as depicted below. All three characteristics of behavior are needed to build a trust-based culture. Trust


Some organizations have a fear-based culture where employees are afraid to speak up. Employees do not feel safe in reporting wrongdoing in a fear-based culture. They may have come to believe that the organization only pays lip service to issues related to transparency. They may feel that reporting wrongdoing within the organization may result in being retaliated against. They may have witnessed first-hand the way individuals who have reported wrongdoing were marginalized by the organization. The culture organization might be characterized as having a “kill the messenger” culture.

In his best-selling book, Drive: The Surprising Truth About What Motivates Us, Daniel Pink writes that when fear is present in an organization, it can lead to “The Seven Deadly Flaws”:

  1. It can extinguish intrinsic motivation.
  2. It can diminish performance.
  3. It can crush creativity.
  4. It can crowd out good behavior.
  5. It can encourage cheating, shortcuts, and unethical behavior.
  6. It can become addictive.
  7. It can foster short-term thinking.

The effects of fear-based tactics can negatively impact employee engagement and create a stressful environment in the workplace where problems are swept under the rug, not dealt with. Things build up until they boil over and, in the extreme, can lead to a collapse of the organization.

The opposite of a fear-based culture is a culture where everyone within the organization feels psychologically safe. The concept was first coined by Harvard Business professor Amy Edmondson. The term psychological safety is “a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.” When there’s no fear of punishment, it leads to more innovation, increased productivity, and an authentic environment of candor.

The underlying culture of an organization directly relates to ethical behavior. Decisions are made based on these characteristics. All too many organizations pay lip service to their culture and how employees are treated when speaking out about improper behaviors in the workplace.

Employees must counteract the tendency to be quiet or fall victim to the bystander effect and stand silently by, let others put their jobs on the line, and let managers’ behavior go unchecked. This was the direct cause of the fraud at Wells Fargo where employees were reluctant to speak out about the bank’s creating unwanted accounts and credit cards for unsuspecting customers and selling them unwanted services. The bank’s reputation took a hit which still affects it years later.

Posted by Dr. Steven Mintz, The Ethics Sage, on March 2, 2021. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/. Follow him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.

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