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Article Excerpt
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Research on leadership has identified trust as a critical element of both leader effectiveness (Hosmer, 1995; Shamir et. al, 1998) and firm performance (Davis, Schoorman, Mayer, and Tan, 2000). The link between employees' trust in leadership and firm performance is quite clear; as trust increases, firm performance rises. Less obvious is how managerial leaders can generate trust among their subordinates. In fact, many forces seem to be counter to the process of trust-building. Emphasis on efficiency, resource conservation, flat organizational structures, and reliance on technologically-mediated communication all contribute to relatively large spans of control and limited interaction with subordinates. In the face of these trends, today's leaders are still expected to contribute to firm performance by developing effective, productive relationships with employees. Given the seemingly contradictory demands understanding how leaders build trust among their subordinates is very important.
The purpose of this study is to investigate factors that may contribute to the development of employee trust in leadership and thereby increase firm performance. Our investigation is guided by social influence theory, which supports our argument that the influence process is central to the development of trust between subordinates and managers. Specifically, we focus on a manager's use of rational influence tactics, the provision of autonomy to subordinates, and the quality of the leader-member exchange relationship as processes by which managers may attempt to develop trust with their subordinates. We then consider the importance of trust on the firm's performance through a measure of restaurant unit sales.
Theory and Hypotheses
Social influence and the development of trust
Social influence theories focus on the processes used to form, maintain, or change social norms (Turner, 1991). In an organizational setting, social influence refers to the different ways organizational members choose to influence the behavior and attitudes of other members. Given that the current organizational environment is centered on team-based relationships, managers are often expected to achieve the highest level of performance through the creation of relationships characterized by trust, partnering, coaching, and self-responsibility. To be trusted, managers must go beyond the expected modes of behavior (Kelman, 1961); as trust is established employees are more willing to accept management's judgments and decisions (Tyler and Degoey, 1996). With ever increasing demands on managerial time and resources, going beyond follower expectations in today's business climate is clearly a formidable challenge. Managers may meet this challenge through the use of jointly designed responsibilities, action plans, and performance goals (Randolph, 2000). The competent use of social influence is a way to persuade employees to formulate team-based attitudes and practice collaborative behaviors consistent with this new management model. Command and control tactics are outdated in most organizations today, and managers may find that social influence helps to generate desired performance outcomes. Three social influence tactics that managers may use to inspire employee trust are rational influence, the provision of autonomy, and the development of high-quality leader-member exchange relationships.
* Rational influence tactics. These are specific types of proactive behavior used to exercise social influence (Yukl, 2002). A manager's choice of influence tactics directly affects team development (Douglas and Gardner, 2004) and subordinate attitudes and behaviors (Yukl, 2002). Rational influence tactics include using logical reasoning and factual knowledge to influence others (Kipnis and Schmidt, 1982, Yukl and Tracey, 1992). Studies suggest that managers use rational tactics to communicate respect, to recognize that a subordinate understands managerial objectives and has technical knowledge, and to strengthen relational ties (Farmer, Maslyn, Fedor, and Goodman, 1997; Tepper et al., 1998). Maintaining respectful relations is key to trust development (Tyler and Degoey, 1996). As such, we believe that a manager's use of rational influence tactics will directly influence the extent to which employees trust his or her leadership.
Hypothesis 1. The use of rational tactics by managers will be positively related to employees' trust in leadership.
* Provision of autonomy. Autonomy reflects the extent to which an individual perceives a sense of choice and control over his or her actions (Thomas and Tymon, 1994) and when and how work gets done. Spector (1987) found that employee control is associated with job satisfaction, commitment, involvement, performance, and motivation. These findings suggest that for optimal motivation, employees and work groups must have some degree of control over their work effort and performance. For instance, work teams with greater responsibility, input, and sense of personal control are likely to experience greater meaningfulness, which, in turn, is associated with motivation and quality of performance (Hackman, 1987).
When managers give group members autonomy, they are sharing control, and this demonstrates a high level of trust in employees. Trust is seen as a reciprocal process, whereby trusting a group and sharing control over group activities inspires trust in return (Tyler and Degoey, 1996). Thus, managers may use autonomy to demonstrate their trust in employees and persuade employees to trust them in return....
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