Interrelation of organizational climate of trust, the trust profile of leaders and business performance

Abstract

Recent research on the role of trust for productivity, innovativeness and the effectiveness of change of business organizations (1) has shown a significant interaction of the individual trust profile of leaders, the psychological contract between the leadership of an organization and its members, and the trust climate of the organization.Trust climate in turn has been shown by empirical studies to have a so far underestimated bearing on how effectively people work together in business processes, how innovative ideas and projects are treated, and how strong the buy-in is in strategic and organizational change.The Trust Management Institute has – working with an academic advisory board and a business executives advisory board – built on these research findings to develop psychometric approaches for assessing the trust climate of organizations, the individual trust profile of leaders, and the quality of the (unwritten) psychological contract in organizations. Thus, we are able to trace weaknesses of an organization’s trust climate back to assessable flaws in the trust profile of its leaders in terms of their self-confidence, their interpersonal relations, their behavior in team situations and their decision-making patterns. In fact, the characteristics of the trust climate of an organization, e.g. the quality of communication, its employees’ commitment, cooperation and views of the future potential of the organization, has been shown to be largely conditioned by the trust profile of individual leaders and the employees’ reading of the psychological contract resulting from their behavior.Comparative case studies by the Trust Management Institute and others (2) in a number of companies, based on psychometric surveys with samples of employees and managers, indicate that a positive climate of trust favors readiness to constructively work towards a common result. A poor climate of trust, on the other hand, typically leads to more control and bureaucracy and slows down innovation.The approach to the assessment of the trust climate is to ask the participants in a structured sample to rate a battery of operational statements on a scale of true to false. The consolidated result reveals reasons for the extent to which trust exists or is missing, and the segmentation by functional and hierarchical sub-samples points to the causes of trustworthiness or mistrust.An interesting finding of our empirical work is that poor individual trust profiles and the resulting damage to the climate of trust in an organization is often the consequence of poor communication, a lack of openness and a control-minded leadership style. By creating awareness of these flaws and stimulating corrective behavioral changes, leaders have in many cases been enabled to rebuild the trust which their organization needs to improve performance. Publications:(1)Keuper, F., Sommerlatte, T., Vertrauensbasierte Führung – Devise und Forschung, Springer-Gabler, Berlin, Heidelberg, 2016(2)Sommerlatte,T., Fallou, J.-L., Quintessenz der Vertrauensbildung, Springer-Gabler, Berlin, Heidelberg, 2012

Keywords: climate of trust, trust profile of leaders, psychological contract, role of trust for commitment, productivity, innovativeness and flexibility

DOI: 10.54941/ahfe1002239