Employees Trust and Work place Performance

Employees Trust and Work place Performance

Trust, besides being an important and basic component of the effectiveness of social processes, is also central in context of the functioning of an organization. Trust is always gradually formed in the process of social exchange between two parties in an organizational context. In the organization, it is an effective predictor of employees’ positive attitudes and behaviours, such as cooperative behaviour, organizational citizenship behaviour, organizational commitment, and employee loyalty. Hence, promoting employees’ trust in the organization is one of the prime objectives of every management. However, development of the employees’ trust is always a challenging task for the management.

Trust can be defined as the firm belief in the reliability, truth, or ability of someone or something. It can be the case that employee trust in the work place influences the employees’ behaviour, which in turn affects the organizational performance. In particular, the amount to which employees trust that they get honest and fair treatment in the organization can influence the extent to which they engage in opportunistic behaviour or otherwise. Thus, the degree of trust which the employees have in the management has an impact upon the performance of the organization.

The employees, if they possess high reliance in the competencies and proficiencies, then they generate deep trust. The development of such trust amongst the employees creates distinctive qualities and the commendable organization of employees.  There exists a positive association between the organizational performance and confidence. Additionally, trust outlines the behavioural context of the organizational functioning and in turn, boosts the employees output and hence, the organizational productivity. Trust has a positive impact on the different organizational and individual outcomes. It also enhances positive mental situations, accessibility, and protection. These conditions are the predictor variables of the employees’ job performance. The individual employee is responsible for the growth of trust in the organizations, but the organization is responsible for developing a congenial and trust-oriented climate. It is crucial that the management to promote the creation of the environment of trust in the organization.

In the present day environment, the trust is a significant issue for the organizational management because it provides many benefits for the employees and the organization. Trust has been defined as the willingness of a person to be vulnerable to the actions of another person based on the expectation that the other person performs a particular action important to the person who is trusting, irrespective of the ability to monitor or control the other person. The term trust reveals as an aggregate of integrity, benevolence, and ability. Integrity is concerned with the perception that the trustee adheres to a set of principles that the trustor finds acceptable, benevolence explains the extent to which the trustee is believed to want to do good to the trustor, and ability is concerned with to be trusted on one matter and not another.

Trust is the emotional bond which binds the employees and the organizational management together. The accumulation of trust is a measure of the legitimacy of the management. It cannot be mandated or purchased. It is to be earned. Trust is the basic ingredient in the organization, the lubrication which maintains the organization. The organizational management has an  enormous responsibility for building trust in the organization. The management is to establish cultures where trust exists in both the directions, from employees to management and vice versa.

In the organization, the degree of social exchange between employee and organization reflects the level of employee-organization relationship. The degree of the employee-organization relationship is an important predictor of employees’ trust. The concept of employee-organization relationship is dependent upon the social exchange taking place in the organization or as well as the inducement-contribution practice adopted by the organizational management.  Social exchange happens when an interest exchange takes place during the beneficiary interaction between the employees. The inducement-contribution practice indicates that the management can motivate employees to make contributions to organization by providing them with inducements.

Employee-organization relationship promotes employee positive psychology and behaviour. The employees’ organizational trust can be considered as a mediator mechanism between employee-organization relationship and employee behaviours. Different extents of employee-organization relationship lead to different individual outcomes through a mediator which is the employees’ trust. Hence, employee-organization relationship is a key predictor of the organizational trust.

Organizations which harness mutual trust between the management and the employees, flourish over the long run. These organizations commit to fundamental integrity in the processes and systems, and in the employees. In such organizations people do ‘walk the talk’, even in the toughest of times. Management and employees base their interactions on the principles of honesty, integrity, and partnership. In such organizations both the management and the employees are accountable for adopting the highest ethical practices in every aspect of their work. They keep their promises and follow through on commitments.

There exist significant correlations between ‘human resource practices (such as having formalized policies and procedures) and employees’ trust in the management. There is also some evidence that the degree of autonomy the employees have over their work is associated with the increase of the trust.

Sometimes the management fails to realize the power behind being perceived as having high integrity and being trustworthy. These perceptions truly do impact operational results of the organization. Yet, often the management behaviour drives just the opposite. Trusted management gets rewarded by engaged employees, retention of the talent, positive work culture, and most important by the operational results. Still only a few managements realize the power of integrity and trust as the tools for improved performance.

There are a few warning signs in the organization for the management which indicate that trust is an issue in the organization. These signs are (i) an active, inaccurate grapevine, (ii) elaborate approval processes, (iii) low initiative, (iv) high employee turnover, (v) a high fear factor among the employees, (vi) turf wars, or group disputes, and (vii) defensiveness. These are signs that trust issues exist in the organization and the management is required to take the corrective actions for addressing these issues.

Building of the high levels of integrity and trust within an organization

Trust and integrity has a strong relationship. Integrity means adhering to a code of ethics or a set of values, and it is a vital aspect of every personal and professional endeavour. It means matching the actions with the beliefs across a variety of situations. Integrity, as a measure of coherence and consistency, is a key to building and sustaining trust. People trust those who are honest and consistent in their actions, who fully disclose important information, who are willing to deal with tough issues, and who are open about their objectives and motives.

In simple words, trust means confidence. The confidence, that the actions of the employees and the management are consistent with their words. The confidence, that the organizational management is concerned about the welfare and interests of the employees. The confidence, that the organization has employees who care for each other. The confidence, that the employees have developed the skills which are respected in the organization and valued by the co-employees and the management. The confidence, that the employees have that their belief, their presence, their knowledge, their experience, and their views are been respected at the work place

The importance of trust

Trust provides confidence to the employees that no one takes deliberately or accidentally, consciously or unconsciously unfair advantage of their actions. It means that the employees can put their situation at the moment, their status and self-esteem in the team or organization, their relationship, their job, their career, even their life in the hands of the organizational management with complete confidence.

Trust in the organizational strategies and management is the most critical component in creating commitment towards a common goal. Achieving this trust, however, can be difficult. The management can force employees to show up for the work, especially in trying times, but it cannot, by definition, force the employees to contribute their passion and imagination on a regular basis.

Distrust and defensiveness in the employees are most likely to occur when (i) the management is feared, (ii) excessive pressure is placed on the employees, (iii) organizational performance is not upto the levels expected, (iv) there are several emergency situations are arising, (v) there are pressures and interference in the organizational day to day working, (vi) organizational objectives and goals are not clear to the employees, and (vii) there is unrest in the organization because of absence of impartial human resource practices in the organization.  The fear-distrust cycle builds a climate of low initiative and creates a dependent, passive, and conforming workforce. The effect is the presence of the environment which is fast-paced and a rapidly changing workplace. Hence there is a necessity to break the fear-distrust cycle in the organization.

For the organization to have good operational results, the organizational management is required to place a high value on the integrity and trust and then communicate this value to all the employees in a way which conveys sincerity and commitment. Furthermore, the management is to carefully plan and develop trust-building strategies, addressing five crucial areas which directly impact the level of trust the employees have in the organization. These areas are (i) the organizational vision, (ii) the organizational values, (iii) the compensation as well as the incentive and rewards system, (iv) the work environment, and (v) the management decisions.

Innovative behaviour is the key resource for maintaining organizational competitive advantage and sustainable development. When employees trust in the organization, they perceive external environment as safety, and be more willing to take risks. Employees with psychological safety in the work place share ideas and knowledge with other employees, and even try creative ideas in their job. Hence, employees’ trust in their organization lead them to be more likely to share ideas and knowledge (an important driver of innovative behavior) among employees, which means that organizational trust is positively related to employee innovative behaviour.

According to the interactive process of organizational creativity, employees and organizational factors have interactive effects on the employees’ innovative behaviour. The innovative climate in the organization is an important contextual variable for the employees’ innovative behaviour. Trust can increase employee innovative behaviour in the work place. However, if there is no guidance provided by innovative climate, employees cannot show innovative behaviour, since they do not know which behaviours are beneficial to the organization. Hence, innovative climate is a moderator which helps in understanding the boundary conditions of the effect of trust on the employee innovative behaviour. The schematic diagram of the employees’ trust and their workplace behaviour is given in Fig 1.

Fig 1 Schematic diagram of the employees’ trust and their workplace behaviour

Trust and innovative behaviour

As per the social exchange principle, the more employees trust in the organization, the more efforts the employees put for the organization. Employees are willing to work hard and spend energy for the organization when they have trust in the management. If employees feel that they are trusted and they perceive a climate of trust, they engage in more positive behaviours which results into positive benefit to the organization. Since employees know the trust between them and organization is mutual, they often believe that their behaviours are at low risk.

Trust climate is the most important dimension of creativity in a team. If employees work in an environment which is trustworthy, they feel no hostility from other team members. Hence, they are more likely to discuss and debate collectively, which, in turn, stimulate new useful ideas and promote employee innovative behaviour. This typical environment is an important factor in motivating employees to put forward new ideas.

In addition, trust promotes organizational identification, which results in more positive behaviours. Trust contributes to the organizational identification, which in turn motivates the employees and motivated employees work harder to complete tasks and cooperate with other employees of the organization.  Hence, employees exchange ideas smoothly in the workplaces, which then inspire more ideas.

Organizational identification is positively related to organizational citizenship behaviours. Likewise, trust has an impact on employee work attitudes and efficiency. When employees trust in and identifies with the organization, the employees are more willing to react and behave from organizational perspective, and they are also willing to put more efforts into the organization. Hence, the trust is always considered to be positively related to the innovative behaviour.

Trust as a mediator

Several studies have shown trust as a mediator. Various conclusions of these studies are (i) some performance results had been impacted by the trust (ii) employees’ trust is an institutional trust (iii) increased levels of employees’ trust generate a conducive working environment and there is a subsequent reduction of the employee turnover and enhanced performance and inspiration to work (iv) social identification and trust at the administrative position have an important mediating effect on the on-line knowledge sharing among the employees of the organization, (v) there is a positive correlation between employees’ trust and the extent of commitment in the organization and (vi) a good supervisor-subordinate relationship increases mutual trust. On the contrary, when trust diminishes, there is a stress built up in the organization and a collapse of the employees’ morale and interest. Further, trust considerably affects productivity, team performance, organizational performance, and employees’ empowerment. Also, employees trust plays a significant role on their work place performance (Fig 2) since (i) team self-efficacy has a significant positive relationship with trust, (ii) team self-efficacy has a significant positive relationship with job performance, (iii) trust has a significant positive relationship with job performance, and (iv) trust mediates the relationship between team self-efficacy and job performance.

Fig 2 Role of employee trust in the work place performance

Mediating effect of the trust

Formation of psychological contacts is a reflection of the trust, and employees form their psychological contacts depending on the degree of incentives provided by the management. Employees with high-level trust undertake more reciprocal behaviours for their organization. If the quality of employee-organization relationship is high, organizational management tends to provide employees with secure employment and a variety of rewards (e.g., economic or social incentives). In other words, management is to be responsible for the employees, which means that the management is willing to invest and maintain a stable and long-term exchange relationship with the employees rather than a short-term and pure economic exchange relationship with the employees.

As per the social exchange principle, employee-organization relationship promotes employees’ trust in the organization, which in turn leads to individual positive behaviours. Hence, when employees and the organizational management has a high-level exchange, employees perceive that incentives provided by the management are more than, or equal to, their actual contributions to the organization, and then they form their psychological contract with the organization and have trust in the organization. In turn, to the exchange for the incentives, employees believe that they have responsibilities to make expected efforts and contributions for the organization. Hence, they are willing to be loyal to the organization, learn organizational specific skills, and perform more innovative behaviour to improve their work performance.

High-quality relationships between employees and the management means organization provides employees with good welfare, employment protection, and career development, which, thus, makes employees perceive themselves as well-treated, and view the management as trustworthy, which causes employees to devote more effort and increase innovative behaviour in the work place. Hence, the trust mediates the positive relationship between employee-organization relationship and the innovative behaviour.

Moderating effect of innovative climate

Though the trust mediates the relationship between employee-organization relationship and the innovative behaviour, yet, there are some contextual variables which strengthen the effect of the trust on innovative behaviour. It is necessary to consider the interactive effect between individual characteristics (e.g. cognitive style, ability, personality, and internal motivation etc.) and external environmental factors (e.g. organizational climate, and task characteristics etc.) on the innovative behaviour.

The organizational climate is often considered as a moderating action which can influence the relationship between the employee’s psychological state and innovative behaviour. Organizational climate refers to a series of perceptions of the employees, and is relevant to organizational policies, practices and procedures of incentives and rewards, and also of support and expectations. It is a perceptive action, which can allow management to get desirable outcomes through providing employees with meaningful environments. There are some specific aspects of organizational climate (e.g. innovative climate) which has an impact on the innovative behaviour.

Innovative climate refers to employees’ perception of the organizational practice, procedures and actions in place to promote the generation and implementation of new and useful ideas. Employees’ creative ideas are often to be supported, and even rewarded, when organizational innovative climate is strong. When employees have trust in the management, they identify themselves with the organization and, in turn, they are willing to put more effort into their work. Hence, an organization with strong innovative climate is more likely to emphasize generating and implementing new useful ideas.

If employees trust in the organizational management, they tend to think and act according to the management’s perceptions of the expectations. They consider the requirements of the organizational innovation, propose new and useful ideas, and put in more effort to implement these ideas. This means that employees pay more effort to innovative activities required by the organization with strong innovative climate. They also perceive the importance of innovation in the organization and are more committed to engage in innovative activities. Hence, innovative climate moderates the relationship between the trust and innovative behaviour such that when the innovative climate is stronger, the relationship between the trust and innovative behaviour is stronger. On the other hand, when the innovative climate is weaker, the relationship between the trust and innovation is weaker.

Moderated mediating effect of the trust

The innovative climate does not only moderate the relationship between the trust and the innovative behaviour, but also moderates the indirect effect of the employee-organization relationship on the innovative behaviour through the trust. Normally, the trust mediates the relationship between employee-organization relationship and innovative behaviour, and innovative climate positively moderates the effect of the trust on the innovative behaviour. Combining the logic of these two aspects, the innovative climate moderates the indirect effect of employee-organization relationship on the innovative behaviour through the trust, which is a type of moderated-mediation practice.

Although there are many forms of moderated-mediation practices, two practices are used more often. These practices are (i) trust mediates the relationship between employee-organization relationship and innovative behaviour, and (ii) innovative climate moderates the relationship between the organizational behaviour and the innovative behaviour. Hence, the innovative climate moderates the mediating effect of employee-organization relationship on innovative behaviour through the trust, such that the mediating effect is stronger when innovative climate is strong.

Leave a Comment