TRUST IN THE WORKPLACE

A Comprehensive Analysis

By: April M. Schmidt

Advanced General Psychology 6210-5

Instructor: Dr. Derrick Copper

Spring 2004
 INTRODUCTION

Researchers have recognized trust as an important component contributing to

successful collaboration, performance efficiency, and procedural efficacy in workplaces.

“…the most productive work relationships are those based on trust, which may

sometimes be unrecognized, and frequently taken for granted” (Zeffane & Connell, 2003,

p. 3). To facilitate awareness of trust issues in workplaces, this paper will describe trust in

depth based on recent research, beginning with what trust means, moving on to the

various types of trust, the benefits it brings to the workplace, and finally, the paper will

discuss barriers to trust with suggestions for improving trust relations in the workplace.

As Advanced Psychology begins to focus more and more on organizational issues as

economies continue to become more and more global, trust in the workplace will remain

a primary concern.

DEFINING TRUST

Trust is commonly defined in two ways: as a psychological (cognitive) (Kramer,

1999), or calculative (Young & Daniel, 2003; Zeffane & Connell, 2003), state and as a

decisive state. The psychological definition holds that trust encompasses both thoughts

and feelings. Specifically, it is the perception that we are vulnerable to the actions of

others on whom we depend with respect to an inability to know their motives, intentions,

and future actions.

Decisive trust, according to Kramer (1999), consists of two modes: rational and

relational. Based on choice, rational trust acts on our knowledge of another. This

knowledge aids us in deciding whether we choose to trust this person. We assess the

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other person’s trustworthiness, or willingness to be trusted, which plays a part in our

decision to trust him or her. Relational trust refers to trust as established in a social

setting, such as the work environment, where certain trusts must be in place to facilitate a

productive atmosphere between coworkers.

Young and Daniel (2003) define the second kind of trust as emotional, which is

considered an irrational, impulsive method for deciding trust. Even though it is associated

with lower quality decision making, emotional trust remains a common and important

part of relationships within the workplace.

Zeffane and Connell (2003) say that actions that result from trust construct

confidence and destruct fear. They provide ways of defining trust as creating two

feelings: (1) passive creates feelings free of worry or suspicion and (2) active enhances

confidence.

Basically, decisions regarding trust involve risk. Weighing costs and benefits

plays a key role in our decisions to trust. Perception plays a large part in this, too, because

often we don’t know what the outcomes of trust will be. Let’s examine the different types

of trust and see how they affect our relationships at work.

TYPES OF TRUST

Dispositional trust (Kramer, 1999) refers to an individual’s predisposition to trust.

People’s experiences with trust relationships form a general outlook on human nature

which guides them in making trust decisions. Experts have not paid much attention to

dispositional trust as a major factor in the workplace but have suggested that testing and

measuring it could benefit selection of more trustworthy employees.

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 History-based trust (Kramer, 1999) relies on the build up of interactions between

people over time. Initially, trust is given with expectations for fulfilling that trust. If the

expectations are met, trust increases. If unmet, trust decreases. This type of trust usually

takes place on a personal level and is difficult for management to assess, especially in

large organizations. Management may rely on third parties to assess the trustworthiness

of individuals.

Third parties as conduits of trust (Kramer, 1999), or gossip, serves as a

secondhand trust determinant. Using gossip to make decisions regarding trust proves

inherently problematic because gossipers tend to reveal only part of the necessary

information on which trust should be based. In some situations, this means that trust is

bolstered for some people and degraded for others, each without merit and dependent on

the subjective view of the gossiper. Gossip may also be relayed according to what the

gossiper thinks the gossipee wants to hear. The importance of this concept lies in

recognizing that trust can be formed in this way but it doesn’t have to be a permanent

representation of someone’s trustworthiness. Each person assumes responsibility for his

or her own trustworthiness which, ultimately, cannot be determined truthfully through

secondhand information.

Category-based trust (Kramer, 1999) refers to trust based on membership in a

well-known group or organization. Because trust in this form is based on membership

alone, it is elusive. Depending on membership directives, it can be a valid way of forming

trust but in certain instances, it is not. For example, membership at a country club would

warrant an extremely different trust decision than membership in the military. The

tendency with this is that ingroup members trust each other more than they trust people

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outside of the group. Problems arise from blindly trusting others in the group that one

doesn’t really know and excluding those outside of the group whom it may be more

beneficial to trust.

Role-based trust (Kramer, 1999) is based on knowing that the person assigned to

a job can fulfill the requirements of that position accordingly. It is an automatic trust and

recognizable in every organization. Knowing that the person has been through the

appropriate training for their role in the company elicits trust from others. Trust, in this

situation, is formed more from trust in the proven procedures and processes maintaining

the standards for the job than in the person performing the job functions.

Rule-based trust (Kramer, 1999) establishes a sense of normalcy in any

organization and elicits a potent trust-binding force. Rules allow us to know that

coworkers will behave in consistent, procedural ways. This gives us the ability to take for

granted that most employees will follow the rules, thus trust is formed aside from any

personal knowledge about them. This does not mean that the more rules we have, the

better off we are; nor does it mean that every rule is appropriate. Rules, or systems, based

on distrust can be destructive to employee morale. (This will be discussed in more detail

later.) The most effective rules facilitate “spontaneous coordination and cooperation

among organizational members” (p. 581).

Dispositional, history-based, third-party dependent, category-, role-, and rule-

based trust operate on different levels at the same time. Although seemingly complicated,

raising one’s awareness of the differing levels of trust increases understanding of why

one grants trust and why trust is granted, which is important to decision making on all

levels within any company.

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 BENEFITS OF TRUST

The benefits of trust in organizations are known as: decreased transaction costs, increased

spontaneous sociability among employees, and increased adaptability to appropriate,

authoritative regulation (Kramer, 1999).

Social decision heuristics facilitate trust and provide one way to reduce

transaction costs. Heuristics involve probing various problem-solving strategies that

require self-education (such as feedback evaluation) to improve performance. “Trust

heuristics facilitate the exchange of a variety of assets that are difficult to put a price on

but that mutually enrich and benefit each organization’s ability to compete and overcome

unexpected problems” (Kramer, 1999, p. 582). When heuristics are based on giving

people the benefit of the doubt when their trustworthiness comes into question,

individuals as well as the company will profit.

Spontaneous sociability refers to cooperation, genuine kindness, and above-and-

beyond-the-job performance, all of which contribute to the greater good or collective

achievement and health of its members (Kramer, 1999). If trust is abundant at a company,

a self-induced willingness to cooperate and go-the-extra-mile mentality will be present

among employees.

Voluntary deference (respect for authority) is another benefit of trust. The

impossibility of management’s ability to constantly explain their every decision is

understandable given that they have other priorities as well. This, combined with the

expense of constant monitoring, prevents management from catching every misconduct

or noticing every favorable act. Because of this, management must rely on the good

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nature of employees. Nurturing and sustaining employee loyalty, commitment, and

deference proves a difficult task for management; however, it must be carefully

considered if productivity is expected to continually improve. When employees trust

members of management, they will be more willing to accept decisions even when they

are in disagreement (Kramer, 1999).

In addition, as noted by Zeffane and Connell (2003), “a survey of 50,000

employees” (p. 4) sampled a variety of organizations and determined that supportive

managers experience lower stress and higher production rates than their counterpart. In

turn, employee support of management has a similar effect, allowing management

elevated success by reducing stress and strengthening company-wide performance

(survey conducted by Davis & Landa, 1999). This shows the importance of both

managers and employees working together to maintain a mutually trusting relationship

People are most likely to accept authoritative decisions when employees: see

management as fair and impartial, place trust in management’s benevolence, and believe

that management views them as valuable to the success of the company (Kramer, 1999).

BARRIERS TO TRUST

Researchers have recognized some of the major psychosocial factors that obstruct

trust formation. These include: suspicion (major component of distrust), surveillance

systems, breaches in psychological contracts, and the fragility of trust.

Suspicion (and distrust) (Kramer, 1999) may arise within an organization for

many reasons. Suspicious people tend to constantly evaluate and question the

genuineness or motives behind other people’s behavior. In some situations, they may

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have good reasons for doing so, though generally speaking, it opposes building healthy

relationships. Some people’s expectations may be unreasonably high. In this case, the

person repeatedly experiences trust violations, causing them to be more suspicious. Their

suspiciousness may transfer to others depending on how vocal their feelings are.

Suspicion may surface as a result of dispositional (individual predisposition to distrust)

and situational (specific incidents) and “influence individuals’ self-consciousness and

perceptions of being under evaluative scrutiny” (Kramer, 1999, p. 588).

As well, social categorization may contribute to distrust and suspicion. Social

groups create mental barriers to trust as people who belong to certain groups view people

outside of the group as untrustworthy (Kramer, 1999). Awareness of this phenomenon is

important to us as many organizations consist of various kinds of groups, which are vital

to the success of the company.

Surveillance systems (Kramer, 1999), according to growing evidence, can

create distrust in organizations. Companies often use employee tracking systems to make

certain employees follow the rules and to prevent misconduct without realizing that these

systems create distrust and can foster employee resentment, which leads to acts of

defiance. Employee perceptions of being forcefully controlled inhibit motivation because

monitoring systems make them feel untrustworthy therefore contemptuous and

mistrustful. Thus, systems enacted with the intent to guarantee trustworthiness weaken

people’s ability to monitor their own behavior and make it harder for them to show that

they are trustworthy because the system is perceived as more trustworthy than the people.

This may cause resistance to favorable actions, interfering with efficient productivity

(Kramer, 1999).

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 Psychological contracts involve employee opinions about mutual contributions

within their relationship with the employer. These mental contracts constitute what

employees think the company owes them in return for their contributions to the company

(Kramer, 1999). The breaching of these contracts results when an employee perceives

the company as failing its perceived obligations. This phenomenon is precarious because

it is based so much on perceptions, which vary greatly from person to person; however,

remains important to a factor affecting trust issues. According to Robinson and Rousseau

(1994) as cited in Zeffane and Connell (2003), perceptions involving breaches of

psychological contracts can create difficulties leading to job dissatisfaction, increased

employee turnover, and decreased production levels. A study on this established that

people with low initial trust in the company tended to become more distrustful of the

company with time (Kramer, 1999). People with high initial trust tended to become more

trustful with time. This demonstrates that trust is fragile and hard to maintain.

Fragility of trust (Kramer, 1999). “Numerous scholars have noted that trust is

easier to destroy than create” (p. 593). This is true for several reasons: (1) instances that

break trust down are more apparent than those that elevate trust, (2) trust-degrading

occurrences are judged more shrewdly than those of trust-building events, and (3) people

tend to rely more readily on bearers of negative information than on bearers of good

information (Kramer, 1999). Moreover, third parties tend to accept negative gossip more

readily than positive messages and gossip. Strong relations, in which people share

information directly, positively impact trust bonds while weak, indirect relations oppose

them. Gossip equals presumptive trust, which equals perpetual distrust.

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 Young and Daniel (2003) recognize the importance of employees’ distrust in

management, stemming from their perceptions that management acts and makes

decisions without care for the employee, caring instead for what they think is best for the

company. In this regard, the benefit that management could experience if it put

employees first when making decisions, would result in increased respect and deference

from employees. Lack of concern and sympathy for employees and poor management

practices contribute to trust degradation, in turn, lowering productivity.

Costigan, Ilter, & Berman (1998) identify employee feelings of powerlessness as

a barrier to trust in organizations. When employees feel that they have no control over

work-related decisions, productivity declines. A solution to this problem is to implement

distributed leadership (Handy, 1999, as cited by Costigan, Ilter, & Berman). This

constitutes letting power slide from one person to another throughout the various stages

of a project and depending on the skills required at each stage. Establishing self-managed

teams encourages employee empowerment because it shows that the employer trusts its

workforce. This trust is reciprocated as employees agree to take on extra-role

responsibilities.

American Corporate Culture

Werhane (1999) argues that American employment practices, in general, create

distrust in organizations. She notes that America sets the example for business practices

globally but may not be the appropriate model, as its business ethics do not promote long-

term profits or growth.

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 To begin, Werhane (1999) points out that while the American political system

guarantees many political rights, the same rights do not apply to private-sector

employment. Management does not rely on employee input for decision making even

when those decisions may affect employees profoundly. Werhane suggests that

employees deserve fair treatment at work which includes basic human rights, such as

equality, autonomy, growth, and freedom. A workplace that upholds these rights for

employees conduces a trusting atmosphere.

In addition, Werhane (1999) feels that “at will” employment contracts should be

accompanied with the right to appeal employment decisions. These contracts allow

employers to hire or fire at any time with or without reason and allow employees to leave

at any time. “At will” employment opposes the right to autonomy and free choice,

promotes a mentality wherein people are treated as property to be exploited or exposed of

at the will of the company, and can result in abusive managerial decisions occurring

without justification or explanation. This creates an atmosphere filled with suspicion and

deception.

As cited in Werhane (1999), Pfeffer (1994, 1998) accumulated much evidence

showing that the most profitable companies are ones in which employees and managers

are the major stakeholders. This strategy includes “selective hiring, employment security,

decentralization of decision making, high compensation, continuous training, open

information, and reduction of status barriers” (Werhane, 1999, p. 241). However, since

popular management literature does not promote such practices because of an economic

rather than a political mentality, current practices are likely to remain and the employees

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will continue to be viewed as “statistical collective quantitative phenomena measured in

terms of their cost” (p. 242).

As a result of this, Werhane (1999) suggests that employee loyalty, on the whole,

will undergo a shift. When once employees committed themselves to companies, they

will learn to be loyal only to themselves. In time, professionalism will grow as people

build their own associations through which they will be able to attain private licensure,

independent employment contracts, and so on.

SUMMARY

In exploration of the various components of trust-related issues in the workplace,

its importance is underscored and the realization that it is essential to successful

organizational performance arises. Trust can be defined in many ways but always

requires risk. The numerous types of trust demonstrate the difficulty and complexity of

related issues and identification allows for a clearer understanding of where a company

stands in respect to its trust relationships. A large barrier to trust may be a cultural one,

which further complicates trust issues for all companies. Still, management should place

high importance on addressing trust issues if they care about the success of their

company.

REFERENCES

Costigan, R. D., & Iter, S. S. (1998). A multi-dimensional study of trust in organizations.

Journal of Managerial Issues, 10, 303-318.

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Kramer, R. M. (1999). Trust and distrust in organizations: Emerging perspectives,

enduring questions. American Psychological Review, 50, 569-598.

Werhane, P. (1999). Justice and trust. Journal of Business Ethics, 21, 237-250.

Young, L., & Daniel, K. (2003). Affectual trust in the workplace. International Journal

of Human Resource Management. 14, 139-156.

Zeffane, R., & Connell, J. (2003). Trust and HRM in the new millennium. International

Journal of Human Resource Management. 14, 3-12.

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