Trust In The Workplace

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 rulebased 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-andbeyond-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 longterm 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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