The effect of HRM practices on impersonal organizational trust

Abstract

Organizations face an increasing need to foster trust. However, there are fewer opportunities for developing interpersonal trust and an evident need to establish complementary forms. The purpose of this paper is to examine the effects of various human resource management (HRM) practices on the impersonal dimensions of organizational trust. The hypotheses are tested on a sample of 715 respondents from large corporations in the ICT and forest industries in Finland. Structural equation modelling was used. Employee trust in the whole organization is connected to perceptions of the fairness and functioning of HRM practices. Such practices can therefore be used in order to build the impersonal dimension of organizational trust. Future studies should also include interpersonal dimensions of organizational trust. Another limitation is that datasets from different industries were merged: future studies should analyze data from the ICT and forest industries separately. HRM practices are used in all organizations, and could offer a practical solution to the problem of building and retaining trust without developing a special system or specific methods. This study contributes to the growing body of literature on the role of trust in the context of organizational relationships. To the best of the researchers' knowledge this is the first study focusing on the impersonal element of organizational trust and its relationship with HRM practices.