Introduction
Imagine starting a new job, excited and ready to make a good impression. On your first day, you’re asked to install location-tracking software, sign an arbitration agreement, or even delete your social media accounts. You’re eager to cooperate, so you agree, even though you may not fully understand these terms. Over time, you start to feel uneasy. Did you really understand what you agreed to? This feeling of uncertainty might lead to frustration, mistrust, or even thoughts of leaving the company or taking legal action.
This scenario is more common than you might think. It can create problems for both employees and organizations. For example, employees at a large company initially agreed to use location-tracking devices but later sued when they realized the tracking extended beyond work hours. Reality TV contestants, who signed agreements limiting their privacy, later sued networks when they felt exploited. Even singer Taylor Swift regretted a contract she signed, leading her to re-record her albums and disrupt her old record label.
In all these cases, the organizations secured legal agreements, but the individuals involved felt misled or uninformed. This mismatch between legal consent and genuine understanding can harm relationships and trust, ultimately backfiring on the organization.
But why does this happen? And what can companies do to avoid it?
Psychological Biases That Cause Misunderstandings
People often misunderstand how others perceive agreements. For example, when someone signs a document, we might assume they fully understand and agree to the terms. This assumption comes from psychological biases:
- Relying on Observations: We judge others’ understanding based on their actions. If someone signs a contract, we assume they agree, even though their behavior doesn’t always reflect their feelings.
- Projecting Our Knowledge: We assume others know what we know. If we understand a contract, we think others do too, even if they don’t.
These biases can cause organizations to overestimate how well employees understand agreements. As a result, they may be surprised when employees later express dissatisfaction or feel misled.
What Research Shows
To understand this issue, researchers studied how people perceive consent in different situations.
- Understanding Consent in Scenarios: In one study, participants read about an employee named Skylar who signed a mandatory arbitration agreement and a patient named Alex who agreed to an uncovered medical procedure. Those reading from the perspective of the HR representative or doctor assumed Skylar and Alex were more informed than they actually were. However, participants reading from Skylar’s or Alex’s perspective realized the agreements were not fully understood.
- Positive Agreements Still Misunderstood: In another study, participants who received unexpected bonuses and agreed to a fair 50/50 split reported feeling less involved in the decision than those making the offers assumed. Even in positive situations, people may feel less informed than others believe.
- Real Employment Cases: Researchers surveyed hiring managers and employees about consent during the hiring process. While 52% of managers believed their new hires fully understood the terms of their employment, only 20% of employees felt the same. Similarly, 65% of managers thought employees fully agreed to these terms, but only 39% of employees shared this view. Employees who felt uninformed were more likely to disengage, feel their workplace was unfair, and consider quitting.
The Impact of Misunderstanding
When employees feel they didn’t fully understand what they agreed to, it can lead to serious consequences for organizations:
- Disengagement: Employees may feel disconnected from their work.
- Mistrust: A lack of clarity can damage trust between employees and employers.
- Turnover: Dissatisfied employees are more likely to leave.
- Legal Risks: Misunderstandings can lead to lawsuits or public backlash.
How Companies Can Build Trust
Organizations can bridge this gap by prioritizing transparency and clarity. Here’s how:
- Provide Time and Space: Give employees ample time to review policies and contracts. Rushing through agreements increases the likelihood of misunderstandings.
- Use Clear Language: Avoid jargon and legal terms that might confuse employees. Simple, straightforward language ensures better understanding.
- Encourage Questions: Create an environment where employees feel comfortable asking questions without fear of negative consequences. This builds trust and fosters open communication.
- Reassess Over Time: Some roles and responsibilities change, so regular check-ins can help ensure employees still feel informed and agree to their evolving duties.
- Explain Difficult Terms: If certain policies are unavoidable but may seem restrictive, be upfront about why they are necessary. For example, explain why location tracking is required or why certain data-sharing policies are in place. Employees are more likely to accept tradeoffs when they understand the reasoning behind them.
The Importance of Genuine Consent
True consent is about more than just signing a document. It requires that employees genuinely understand and agree to the terms. Organizations that prioritize informed consent will reap the benefits of a more engaged and loyal workforce. Employees who feel respected and trusted are more likely to stay and contribute positively to the organization.
By addressing the “informed consent gap,” companies can build stronger relationships with their employees. This not only reduces risks like disengagement and turnover but also fosters a culture of trust and collaboration. Ultimately, a workforce that feels valued and informed is key to long-term success.
