The Neuroscience of Organizational Trust and Business Performance: Findings From United States Working Adults and an Intervention at an Online Retailer.

Rebecca Johannsen,Paul J Zak

doi:10.3389/fpsyg.2020.579459

Abstract

This paper reports findings from a nationally representative sample of working adults to quantify how a culture trust improves business performance. Analysis of the national sample showed that organizational trust and alignment with the company’s purpose are associated with higher employee incomes, longer job tenure, greater job satisfaction, less chronic stress, improved satisfaction with life, and higher productivity. Employees working the highest quartile of organizational trust had average incomes 10.3% higher those working in the middle quartile of trust (p = 0.000) indicating that trust increases productivity. In order to demonstrate the causal effect of trust on business performance, we created an intervention to increase organizational trust in a division facing high job turnover at a large online retailer. The intervention increased organizational trust by 6% and this improved job retention by 1%. These studies show that management practices that increase organizational trust have salubrious effects on business performance.

Highlights

Peter Drucker challenged traditional labor economics by arguing that “knowledge workers” (Drucker, 1988, p. 3) have significant power when choosing for whom they work, where they work, and what they work on (Drucker, 1988)
We propose that a set of behaviors that create trust between work colleagues is an aspect of organizational culture that improves business outcomes including productivity, job satisfaction, turnover, and well-being
Counter to this perspective is the labor market gift exchange model developed by Akerlof (1982) in which work colleagues respond to the gift of wages offered by the firm by providing discretionary effort to their employers (Mahmood and Zaman, 2010; Akerlof, 1982; Fehr and Gachter, 2000)

Summary

Introduction

Peter Drucker challenged traditional labor economics by arguing that “knowledge workers” (Drucker, 1988, p. 3) have significant power when choosing for whom they work, where they work, and what they work on (Drucker, 1988). Peter Drucker challenged traditional labor economics by arguing that “knowledge workers” At the time of Drucker’s writing, and even today, many companies de-motivate their "human capital" by treating them like capital rather than humans. Traditional labor economics presumes that work provides disutility and employees are expected to shirk whenever possible (Spencer, 2015). The traditional labor economics view runs counter to an accumulation of evidence showing that human-centric organizations have higher productivity and lower job turnover rates (Rastogi, 1986; Vandenberghe, 1999; Hall and Yip, 2016; Jena et al, 2018). Companies have discovered that employees often quit to take jobs that are more creative, exciting, and energizing (Bersin, 2014). Many colleagues desire autonomy, honesty, appreciation, and work that has a positive impact on their communities (Zak, 2017)

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Conclusion