BUS603: Managing People

4.1. Research Implications

This study finds that organizational trust is the mediating mechanism between EOR and employee innovative behavior, and an innovative climate will moderate this mediating effect. The findings of this study have several research implications.

First, the empirical results have shown that the EOR has a positive impact on organizational trust and innovative behavior. Social exchange theory predicts that organizations can promote individual positive attitudes and behaviors through providing employees with inducements. Our theoretical implication is consistent, but different, with the conclusion found by Lambert and Shaw. Lambert found that organizations invested in employees through providing employees with vocational development, training opportunities, which could influence employees' attitudes and behaviors. Shaw found that EOR could lead to increasing employee performance and decrease quit intention. Our results provide evidence for deepening understanding of the relationship between EOR, organizational trust, and innovative behaviors, which has been less studied by previous research.

Secondly, this study has revealed that organizational trust is an important mediating mechanism between EOR and innovative behavior. Previous literature pay more effort towards investigating the direct effect of EOR on employee attitudes and behaviors, however, there was little effort put into identifying the mediating mechanism between EOR and innovative behavior. We have found that organizational trust partially mediates the relationship between EOR and innovative behavior, which can then provide us with evidence to interpret the effect of EOR on individual attitudes and behaviors.

Finally, we also find that the innovative climate plays an important role in the relationship between organizational trust and innovative behavior. Some scholars have found that the innovative climate can be viewed as a moderating variable influencing the relationship between personal psychological states and innovative behavior. However, our study has examined the moderating effect of an innovative climate that is an important boundary condition which can drive organizational trust to innovative behavior. This means that we have to recognize the fact that supporting and encouraging employees to generate and implement new useful ideas will help organizational trust switch to innovative behavior, and strengthen the indirect effect of EOR on innovative behavior via organizational trust. This can help us to understand the process and impact of EOR on innovative behavior.