A new survey from Watson Wyatt finds that Canadian employees have lost trust in senior management, a development that could threaten competitiveness.

While new data shows an increase in the commitment of Canadian employees to the organizations they work for, worker trust and confidence in senior management have fallen and employee engagement is weak. These findings reveal a major threat to future corporate competitiveness, according to the 2002 Watson Wyatt Work Canada survey.

Workers’ increasing distrust of corporate leadership and poor perceptions of management effectiveness are hurting the financial performance of their companies, it says. Only 51% of Canadian employees have trust and confidence in their senior leaders and fewer than half (45%) say their senior leaders are effectively managing their companies.

“It is quickly becoming evident that few companies have escaped untouched by the fallout from the recent turmoil in the business environment,” said Jan Grude, Human Capital Group’s national practice director, in a press release. “Corporate Canada needs to work on repairing that damage before future financial performance and competitiveness are further hindered. Employees who are committed, but not engaged, do not actively contribute to the organization’s success. To ensure that employees stay engaged, organizations need to effectively evaluate and recognize employee performance.”

The study also revealed that total returns to shareholders are nine times higher for companies with high trust and confidence levels in senior leadership and 12 times higher for companies with high management effectiveness. Findings indicate that companies who engage employees are worth five times more than companies with employees who are disengaged.

In comparing these results to a similar survey conducted earlier this year in the U.S., Canadian firms are faring only slightly better than their U.S. counterparts.