BUS603: Managing People

According to social exchange theory, the more employees trust in the organization, the more effort employees will expend for the organization. Employees are willing to work hard and expend energy for their organization when they trust in their employer. Ekvall and Ryhammar stated that if employees are trusted and perceive a climate of trust, they engage in more positive behaviors to benefit their organization. Since employees know the trust between them and the organization is mutual, they often believe that their behaviors will be low risk. Barczak noted that trust climate was the most important dimension of creativity in a group. If employees work in a trustworthy environment, they will feel no hostility from other members. Therefore, they are more likely to discuss and debate collectively, which, in turn, stimulates new useful ideas and promotes employee innovative behavior. Yong believes that this typical environment is an important factor in motivating employees to put forward new ideas.

In addition, some studies confirmed that organizational trust would promote organizational identification, which would result in more positive behaviors. Aryee, as well as Knippenberg and Schie confirmed that organizational trust would contribute to organizational identification, in turn, motivated employees to work hard to complete tasks and cooperate with other members of the organization. Therefore, employees will exchange ideas fluently in workplaces, which can then inspire more ideas. Liu, Loi, and Lam's empirical studies found that organizational identification positively related to OCB. Likewise, organizational trust has an impact on employee work attitudes and efficiency; when employees trust in and identify with the organization, the employees will be more willing to react and behave from the organization's perspective, and they are also willing to put more effort into the organization. Therefore, we make the following prediction:

H3: Organizational trust is positively related to innovative behavior.