How Trust in One’s Employer Moderates the Relationship Between HRM and Engagement Related Performance

Abstract

Trust can be seen as important element for the effectiveness of organizational engagement. In particular, in order to be engaged to their work employees’ trust in their employer organisation plays a crucial role. This study adopts Dirks and Ferrin’s somewhat neglected model of trust as a moderator on the link between HRM and performance. Using a Finnish data-set from a forestry company, we find that trust in the employer moderates the relationship between HRM and unit-level performance. In three out of six HRM practices studied (communication, career opportunities and job design) the moderation effect was as expected: in a climate where the employer is highly trusted, the effect of the HRM practice on performance was enhanced. However, for three practices (learning and development, performance evaluation and rewards, participation) the effect of HRM was contrary to our hypotheses. We consider the implications of these results for both the trust and HRM literatures, and for HR practitioners.