Controls, Trustworthiness, and Trust in Group Settings

Abstract

This study investigates the effect of group-level versus individual-level controls on coworker trust and employee effort. Prior research is limited to controls in one-on-one settings (i.e., one individual imposing a control on another). In contrast, controls in the workplace are often imposed at the department, or organizational level, where they are less clearly a signal of mistrust. I find that the effect of a control on coworker trust differs depending on whether it is imposed at the individual or group level. Specifically, imposing an individual-level control has a significantly negative effect on coworker trust, while imposing a group-level control has a positive effect on coworker trust. I find that both individual-level and group-level controls have a negative effect on employee effort. I also find that controls have a more negative effect for more trustworthy employees, in terms of both coworker trust and employee effort. In additional analyses, I find evidence that by selectively imposing controls only on less trustworthy employees, managers may be able to mitigate the negative effect of controls on employee effort while still protecting themselves against the most likely threats of employee opportunism.