Organizational trustworthiness and workplace labor productivity: Testing a new theory

Abstract

Based on a secondary analysis of the Australian Workplace Industrial Relations Survey, this study explores several relationships that may link trust to changes in labor productivity. Drawing on Hodson’s work, we examine how - and under what conditions - supportive employment practices and management’s operational competence may contribute to workers’ trust in management, which in turn is hypothesized to lead to an improvement in labor productivity over time. The findings support the hypothesis that more supportive employment practices lead to higher trust in management. However, a similar relationship between management’s operational competence and trust did not obtain, and there was very little connection between trust and improvements in workplace productivity. Further analysis showed that there was considerably more support for our hypotheses when applied to service sector firms: both supportive employment practices and management competence contributed to trust and higher trust led to more rapid incre...