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The Role Of Organizational Trust
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The Role Of Organizational Trust

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  • The theme for this presentation is the role of organizational trust before and after management practices change and its influence like a mediator in the relationship between predictors variables like psychological contract, LMX and job satisfaction. Designed as a multidimensional concept, job satisfaction is related to a set of dispositional and situational factors that are relate to the ability for organizational success. To date, there was no attempt to understand the dynamics of its background and consistent over time, this study aims to contribute to the blurring of the theoretical and empirical gap.
  • Taking Social Exchange Theory as explanatory approach for analysis of the relationships between different variables in the study, we presents a theoretical model, which considers two major predictors of job satisfaction - psychological contract and the leader-member exchange and the mediating role of organizational trust. (SPACE) It is also intended to test this model in two different moments that correspond to before and after the implementation of a development organizational program, to measure its stability but also the existence of changes in the patterns of relationships.
  • Job satisfaction is considered one of the most reliable predictor of individuals’ attitudes in response to the quality of work experiences. Becoming themselves as an emotional and attitudinal reaction related to work, job satisfaction levels influence in a unique way the conduct, whether at individual, organizational and relational level. Understanding the extent to which factors are reflected in the increase or maintain certain levels of satisfaction is justified in its ability to influence the physical and psychological well being and, is naturally reflected in performance measures such as productivity and quality of work.
  • Psychological contract is defined as a series of individual beliefs related to the set of reciprocal obligations and benefits established in respect of an exchange between individuals and their organizations. Featuring a strong influence on how people act in their organization, the feeling that their expectations are met and respected could lead the individuals to a stronger connection with the organization. On the assumption that the processes of relational exchange between individuals, generates more benefits than costs, the psychological contract influence the perception of fairness in the employment relationship which however goes beyond the formal requirements of the job. In this case, it is important to distinguish between objective events, in other words, what really happens in the employee's relationship with the employer, and the subjective cognition, which results from situational factors that shape the interactions between the organizational members and affect the interpretation of each from a certain event.
  • The leader-member exchange refers to the quality of exchange in relations between the subordinate and his supervisor. The leader-member exchange determines the amount of information, resources and support that the supervisor provides to his subordinate in exchange of experience and commitment. When these relations are high quality, tend to be characterized by the existence of reciprocal connections, loyalty, respect and professional behaviour to achieve common objectives. The proximity that characterizes this type of relationship shows high capacity to shape and influence attitudes and behaviour of subordinates on the organization.
  • Organizational trust is related to the relationship between two parties and refers to the expectation with determined level of uncertainty, which a party has in obtaining positive results generated through the relationship with the other party. From social exchange perspective, an individual gives to another on a voluntary way, a benefit, citing the requirement of reciprocity. Trust is developed through the regular fulfilment of obligations and its expansion over time. Closely related to the maintenance of the psychological contract and the development of the relationship with the supervisor, trust is an essential aspect of the interaction between organizational actors and the stability of these relations.
  • Looking into the literature, a set of evidence supporting the existence of relations between the variables under study. There are no known studies that meet in particular the relationship between psychological contract and leader-member exchange with job satisfaction, mediated by organizational trust on a organizational development program context. We proposed two hypothesis: SPACE The first is… The psychological contract is a job satisfaction predictor and the relationship between these two variables are mediated by organizational trust at the two moments of evaluation; And the second is… SPACE T he LMX is a job satisfaction predictor and the relationship between these two variables are mediated by organizational trust at the two moments of evaluation.
  • Based on the use of linear regression models, this study aims to determine at two different times the influence of predictor variables (psychological contract and leader-member exchange) in the criterion variable (job satisfaction). SPACE It is also suggested the presence of the mediator effect of organizational trust in this relationship.
  • The data collection occurred at two different times with the participation of 214 employees in 2003 and 270 in 2007. It is possible to observe a prevalence of male employees in both years of data collection and regarding age, the range between 36 to 50 years old have the major representativeness.
  • As regards the measures, after the application of the factor analysis with varimax rotation were extracted 5 factors. For all variables was considered a 5 points scale from strongly disagree to strongly agree. All survey items are tested for reliability, which ranged from .60 to .91.
  • All the study variables are related. Considering the t-test values in both evaluation years, it can be observed statistically significant differences between mean values for job satisfaction (5,14), psychological contract (1,99), leader-member exchange (6,97), and organizational trust with 2,14.
  • Considering the Linear Regression Model for the relationship between independent variables and dependent variable, it can be observed a positive relationship between psychological contract and job satisfaction. The leader-member exchange and job satisfaction relationship it is statistically significant only in 2007 .
  • In the mediation analysis, with the insertion of organizational trust, the relationship between psychological contract and job satisfaction remains statistically significant. In the leader-member exchange and job satisfaction relationship, with the introduction of the mediator the pattern remains the same. In 2003 the beta value is not significant and in 2007 is presented a beta value of .176. Considering the previous values, we can accept that there is a partial mediation of organizational trust in the relationship between psychological contract and job satisfaction in both years, and that in the case of leader-member exchange the mediation of organizational trust only occurs in 2007.
  • Remembering the t-test values, is relevant refer that the values support the existence of organizational change effects. Therefore, the analysis is based in the observation of the variables behavior before and after the organizational change. The results lead us to two key issues: First, the modification of leader-member exchange and job satisfaction from not significant in 2003 to statistically significant in 2007, and second, organizational trust is a strong predictor of job satisfaction when compared with psychological contract and leader-member exchange. SPACE So, we can deduce that psychological contract goes beyond formal and contracted aspects between employee and their organization, existing informal and not contracted aspects related to a set of expectations that the employee assume as organizational obligations. Therefore, the levels of satisfaction will not be indifferent when considered aspects related to organizational trust, so this variable may contribute for the job satisfaction maintenance even when certain aspects of psychological contract are not fulfilled. SPACE In the leader-member exchange case, organizational trust promotes the employee availability and this bring us to the relational aspects of work, once the supervisor role strengthening may raise the level of trust in organization and job satisfaction. Since is not observed the presence of collinearity between psychological contract and leader-member exchange, the results explanation could build in organizational change occurred between 2003 and 2007 and the redefinition of the leadership processes. If in 2003 the leader-member exchange could find itself diluted in other relational work aspects, after the implementation of the organizational development program we can assume that there is a more objective definition of the supervisor role, allowing a better distinction between what depends of the relationship with the organization and depends of the relationship with the supervisor.
  • Organizational change always brings high levels of uncertainty and causes negative behaviors among employees; it is fundamental to understand how interact the different variables and how these may be used as management tools. Organizational trust can play an important role in maintaining the expectations of employees contributing to effective connection to the organizational strategic objectives.

The Role Of Organizational Trust The Role Of Organizational Trust Presentation Transcript

  • The role of organizational trust before and after management practices change. www.cis.iscte.pt 14 th European Congress of Work and Organizational Psychology May 13 – 16, 2009 Santiago de Compostela, Spain António Caetano Susana Santos Vítor Hugo Silva
  • Theoretical framework.
    • Under the conceptual framework provided by Social Exchange Theory (Blau, 1964), the present study focuses on the mediation role of organizational trust in the relationship between leader-member exchange , psychological contract and job satisfaction ;
    • To test the model stability we develop:
      • A cross-sectional in two different periods in the same organization;
      • The two waves correspond respectively to the time before and after the implementation of a management development programe in the organization.
    14 th European Congress of Work and Organizational Psychology
  • Job satisfaction.
    • One of most reliable predictor from individual reactions into the job experiences quality (Lapierre, Spector & Leck, 2005);
      • Positive feelings of well-being related to job experiences;
      • Related to personal evaluations ;
    • Emocional and atitudinal reactions related to work (Brief, 1998; Spector, 1985).
    14 th European Congress of Work and Organizational Psychology
  • Psychological contract.
    • Individual beliefs related with reciprocal obligations and benefits between individuals in a social exchange relationship (Rousseau, 1995);
    • The relational process between individuals generate more benefits when the relationship goes beyond the organizational formal requirements (Deluga, 1994);
    • Objective events ≠ Subjective cognition .
    14 th European Congress of Work and Organizational Psychology
  • Leader-member exchange.
    • Related to the social exchange quality between supervisor and subordinates (Graen, 1976)...
    • Determines the information alocated to subordinates, resourses and support (Erdogan et al., 2002);
    • It has the capability to determine the organizational behavior and the employees attitudes .
    14 th European Congress of Work and Organizational Psychology
  • Organizational trust.
    • Expectancy of positive outcomes that one can receive based on the expected action of another...
    • Caracterized by uncertainty (Bhattacharya et al., 1998);
    • Related to psychological contract maintenance and to the leader-member exchange relationship.
    14 th European Congress of Work and Organizational Psychology
  • 2007 2003 Job satisfaction 14 th European Congress of Work and Organizational Psychology LMX LMX Psychological contract Organizational trust Psychological contract Organizational trust H1 H1 H1 H1 H2 H2 H2 H2
  • Method.
    • Using LRM we intent to determine in two different moments the influence of the two independent variables (psychological contract and LMX) in the dependent variable (job satisfaction);
    • Using the mediation procedures (Baron & Kenny, 1986) we intent to determine the organizational trust mediation effect in the relationship between psychological contract, LMX and job satisfaction.
    14 th European Congress of Work and Organizational Psychology
  • Sample and procedures
    • Two waves ;
      • 2003 – 214 employees;
        • Mens – 73%
        • Age: ≤ 35 – 33,3% | 36 to 50 – 36,2% | > 50 – 29,5%
      • 2007 – 270 employees;
        • Mens – 82%
        • Age: ≤ 35 – 18,1% | 36 to 50 – 51,7% | > 50 – 30,2%
    • Data collection > survey
    14 th European Congress of Work and Organizational Psychology
  • Measures. (5 points scale from “strongly disagree” to “strongly agree”)
    • Job satisfaction (4 items)
      • In what extent are you satisfied with the following work aspects?
      • (1)The company general management.
      • (2)Actions to modernize the company; ( items adapted from Spector, 1997 );
    • Psychological contract (3 items)
      • (1)Until now, the company has respond to my professional expectations. ( items adapted from Rousseau, 1990 );
    • LMX (5 items)
      • (1)My direct supervisor understands my problems and needs.( items adapted from Scandura & Graen, 1984 );
    • Organizational trust (4 items)
      • (1)Here people feels they can trust in company direction board.( items adapted from Gabarro & Athos, 1978 );
    • All survey items are tested for reliability (Cronbach, 1951) , which ranged from .60 to .91 .
    14 th European Congress of Work and Organizational Psychology
  • Results.
    • There are significant differences between the results in 2003 and 2007 .
    14 th European Congress of Work and Organizational Psychology
  • Results Regression analyses results with job satisfaction as the dependent variable and organizational trust as mediator in 2003 (n = 214) and 2007 (n = 270). 14 th European Congress of Work and Organizational Psychology 2003 2007 Beta R 2 adj. Beta R 2 adj. Psychological contract .594** .417 .524** .458 LMX .103 (ns) .259** ΔR 2 = .423 ΔR 2 = .426 F (2,211) = 77.282** F (2,262) = 112.449** Psychological contract .308** .589 .338** .561 LMX .020 (ns) .176** Organizational trust .533** .398** ΔR 2 = .172 ΔR 2 = .104 F (1,210) = 89.323** F (1,261) = 62.300** ** p < .001 (ns) no significant
  • Results (a) 1st step as suggested by Baron e Kenny(1986) ** p < .001 14 th European Congress of Work and Organizational Psychology ( β=.594**) β=.308** ( β=.103) β=.020 β=.533** ( β=.524**) ( β=.259**) β=.338** β=.176** β=.398** β=.612** (a) β=.416** (a) β=.558** (a) β=.413** (a) 2007 2003 Job satisfaction LMX Psychological contract Organizational trust LMX Psychological contract Organizational trust
  • Discussion.
    • Psychological contract is beyond formal job aspects. It is not indifferent to organizational trust related aspects;
    • Even before the break of certain expectations (after management change practices) there are various aspects that contribute to maintaining the organizational trust and hence for the maintenance of the psychological contract and job satisfaction;
    • The redefinition of the leadership role (after management change practices) allows a better distinction between LMX and psychological contract .
    14 th European Congress of Work and Organizational Psychology
  • Conclusions .
    • Because…
    • Organizational change is always associated with increased levels of uncertainty…
    • Organizational trust can help emplooyes to keep positive levels of job satisfaction and a focus on organizational strategic objectives .
    14 th European Congress of Work and Organizational Psychology