Employee trust and performance constraints in public sector organizations

Abstract

Theory suggests that employee trust is key to productivity in organizations, but empirical evidence documenting links between trust and performance constraints is scarce. This paper analyzes self-collected observational and experimental data on public sector employees from eighteen Latin American countries and finds that individual-level trust is relevant to three types of performance factors. First, high-trust employees are more willing to collaborate and share information with coworkers and are more supportive of technological innovation. Second, high-trust employees have different perceptions of organizational constraints: they are less concerned with low staff quality or lack of discretion to innovate, and more concerned with staff shortages. Third, trust in coworkers is associated with stronger mission motivation. These findings are robust to instrumental variable strategies based on the transmission of trust through social or professional channels. A survey experiment on preferences for social distancing policies shows how trust enhances mission motivation: employee policy preferences align better with the implied government policy when their trust in the public sector is higher.