Organizational Trust Leads to Positive Employee and Organizational Outcomes

Alaina C. Keim & Jean M. Lamont, ​​​​​​​Bellarmine University

This research was conducted by Alaina C. Keim (akeim@bellarmine.edu) and Jean M. Lamont (jean.lamont@gmail.com), Department of Psychology,  Bellarmine University.

The authors would like to thank Ron Landis for his assistance with statistical analyses.

Abstract

The Practices for the Achievement of Total Health (PATH) model (Grawitch et al., 2006) suggests that during stressful times, offering psychologically healthy workplace (PHW) practices may promote employee well-being and better organizational outcomes. However, why and how this link exists remains unclear. This study posits that offering PHW practices and programs increases employee’s trust in their organization, which may make employees more likely to use such programs, even during times of great uncertainty and stress (i.e., during the COVID-19 pandemic), leading to positive employee and organizational outcomes. This study surveyed US employees (N = 362) at a variety of workplaces during the height of the COVID-19 pandemic. As predicted, perceived PHW offerings were associated with more positive employee and organizational outcomes. In addition, we found that increased organizational trust and employee use produced significant indirect effects for these relationships. These results expand the PATH model, offering organizations practical strategies for weathering the next unexpected event or crisis. Future research may test this model in more diverse samples using longitudinal or experimental designs.

The COVID-19 pandemic produced a sudden global crisis for many organizations and was stressful for many employees (Mokline & Ben Abdallah, 2021). The pandemic caused massive organizational change in workplaces, including a dramatic increase in virtual work; new work safety protocols; an increase in workloads, stress, and work stressors; and changes in the types of work being done (e.g., “gig work; Centers for Disease Control and Prevention, 2020; Kniffen et al., 2021; Rudolph et al., 2021). Organizational change can be stressful to employees, as it creates uncertainty, ambiguity, and less control, as well as changes in habits and potential economic concerns (Robbins & Judge, 2018). The resulting stressful response to this change leads to lower psychological health and well-being for employees (e.g., Morgan & Zeffane, 2003; Warr, 2007). One buffer to stress during major organizational change may be whether organizations offer psychological healthy workplace (PHW) practices and programs, as these programs may help employees cope with stress by making stressors seem less threatening and more controllable (e.g., Sulsky & Smith, 2005). However, organizations cannot only offer these programs. They must create environments where employees use them. This study aims to investigate how organizations created such environments during the COVID-19 pandemic and the ensuing crisis.

Psychologically Healthy Workplace Practices and Programs

Grawitch et al. (2006) proposed a PATH (Practices for the Achievement of Total Health) model to coalesce decades of research on healthy workplaces (i.e., an organization that maximizes worker well-being and organizational performance). The PATH model is specific to occupational health psychology and provides concrete solutions for organizations (Chang et al., 2021), making its application during times of uncertainty and crises promising. Grawitch and colleagues (2006) describe five key psychologically healthy workplace programs that are expected to promote employee well-being. Work–life balance programs help employees navigate conflicting demands between home and work life, including paid time off, family leave, and so on. Health and safety programs are those that focus directly on the well-being of employees and include stress management programs, exercise, meditation, and employee assistance services. Employee involvement includes actively involving employees in decision making, thereby increasing job autonomy and empowerment. Employee growth and development includes opportunities for skill development, training programs, and career development practices. Employee recognition allows employees to be rewarded for their contributions and to feel valued and respected for their hard work, including thanking workers for their involvement, giving out formal awards, hosting formal ceremonies, and recognizing ideas made in a group setting or on team projects (Brun & Dugas, 2008).

Positive Employee and Organizational Outcomes

The PATH model posits that PHW practices lead to positive outcomes for employees, including higher rates of life satisfaction, well-being, organizational justice, job meaningfulness, and organizational commitment, and lower work stress and burnout (e.g., Bosak et al., 2017; Caza et al., 2015; Grawitch et al., 2015; Montani et al., 2020; Nohe et al., 2015; Parks & Steelman, 2008; Richardson & Rothstein, 2008). This study focuses on four of those areas (i.e., work–life conflict, stress, motivation, and job satisfaction), as these outcomes may be especially affected by organizational changes in workplace structure (Morgan & Zeffane, 2003), something that occurred in many workplaces during the COVID-19 pandemic.

At the organizational level, positive benefits of the PATH model have included job satisfaction, organizational commitment, employee cooperation, and less turnover (e.g., Rahman, & Nas, 2013; Riordan et al., 2005; Scott et al., 2003; Xu & Cao, 2019). These programs are seen as a structural support system provided by the organization that allows employees to mitigate workplace stress (Grawitch et al., 2006). Arguably the most important organizational outcome to both business leaders and in organizational psychology research is job performance (Viswesvaran & Ones, 2008). Task performance and turnover/turnover intentions are two such criteria that span across disciplines and industries (Muchinsky & Howes, 2019; Viswesvaran & Ones, 2008). Task performance may include objective criteria, such as proficiency and productivity, and subjective criteria, such as quality (Muchinsky & Howes, 2019). Turnover intentions have been used as a proxy for turnover, as they correlate highly (r = .80; Cho & Lewis, 2012). This study focused on these three organizational outcomes: job productivity, job quality, and turnover intentions.

The PATH model is supported by several theories in occupational health psychology. Per the effort-recovery theory (Meijman & Mulder, 1998), the PATH model offers concrete resources to workers and may increase workers’ dedication to their organization and completion of work tasks (Schaufeli & Taris, 2014). In addition, per self-determination theory, these resources may increase intrinsic motivation as they allow for feelings of autonomy, competence and relatedness (Ryan & Deci, 2000). Finally, Lazaurs’ (1991) theory of stress states that in order for a worker to experience stress, one first has to perceive a threat and then decide they do not have the resources to cope with that threat. The PATH model offers programs and policies that could be seen as resources that may mitigate a stress response when work stressors are perceived.

Creating Cultures to Use PHW Programs

Grawitch et al. (2006) state that healthy organizations are not accidental but rather the result of purposeful management of programs that ensure employees’ health and well-being and look beyond immediate financial gains and towards the long-term investment of an organization’s most valuable resource (i.e., its employees). An organization can’t simply offer such programs and policies if the organizational culture doesn’t support the use of such programs (Grawitch et al., 2006). Thus, an important step in the PATH model may be whether or not employees actually use the programs that are offered. What is unknown from the literature is what organizations can do to create an environment where employees feel they can use these programs, especially during times of great organizational change. Therefore, this study aims to test and expand on the PATH model by offering perceptions of organizational trust as a mechanism by which employees use PHW programs, leading to increased positive employee and organizational outcomes.

Expanding the PATH Model: Organizational Trust

Organizational trust is the feeling of confidence, support, and faith in an employer to follow through with commitments, be truthful, and provide actions beneficial to employees (Gilbert & Tang, 1998). It is the confidence and willingness to believe the words, actions, and decisions of organizational managers and leaders (Chen & Sriphon, 2021). Organizational trust is fostered when employees expect positive intentions and behaviors from managers in situations, especially in vulnerable or risky environments (Gao et al., 2011; Huang et al., 2021). Organizational trust is also promoted when leaders demonstrate trustworthiness (e.g., being open, competent, and compassionate) and through organizational mechanisms (e.g., open door policies, sharing of information; Mishra & Mishra, 2013).

During and following times of major organizational change, such as the COVID-19 pandemic, employees may lose trust in their organization due to feelings of being treated unfairly by their employer (e.g., layoffs, downsizing), believing that their employer did not communicate with employees effectively, realizing that their employer was ill-prepared for catastrophic events, doubting their employer’s ability to respond to a similar event in the future, or myriad other reasons. This lack of trust could have disastrous effects for both employees and employers. Distrust could cause employees to be less satisfied with their jobs and more stressed at work, which could take a toll on their health (Morley et al., 1997; Shockley-Zalabak et al., 2000). Distrust may also cause workers to become less motivated to perform their jobs well and more likely to seek new employment (American Psychological Association, 2015, 2017).

Feelings of trust are associated with competence and autonomy, which according to self-determination theory explains how employees become motivated, engaged, and productive (Skiba & Wildman, 2019; van der Werff et al, 2019). Researchers have noted potential conceptual antecedents to trust, such as consistency, openness, integrity, fairness, and reliability (see Mosher, 2013 for review). It reasons that PHW programs could be organizational manifestations of the conceptual antecedents of trust in that they can display an organization’s consistency, openness, competence, and so forth.

In fact, several studies have shown that PHW practices are associated with increased organizational trust. For example, employees who rated their organization as promoting work–life balance were more likely to say their workplaces were trustworthy (Cowart et al., 2014). Greater perceptions of safety climate (i.e., ensuring a safe work environment) are associated with more organizational trust (Avram et al., 2015; Guzzo et al., 2021). Supervisors recognizing employees for good work have been associated with more organizational trust (Bayhan Karapinar et al., 2016; Men et al., 2022). Employee involvement, such as consultation with direct supervisors and higher levels management, employee participation in decision making, and consideration of employees’ view, is also associated with greater levels of organizational trust (e.g., Kumar & Saha, 2017; Morgan & Zeffane, 2003; Timming, 2012). Various examples of employee growth and development (e.g., employees’ ratings of the quality of on-the-job training, learning, development, and career opportunities, job design) are associated with higher levels organizational trust (Lambert et al., 2024; Vanhala & Ahteela, 2011).

Once employees become trusting of their organization, a culture of trust (i.e., critical norms, attitudes, and actions) is established and a cycle of trust can continue between employees and the organization (Mishra & Mishra, 2013). This can make employees feel that management supports and values them, which creates a critical context for employees to engage with and use PHW programs (Grawitch et al., 2006). That is, organizational offerings of PHW may foster organizational trust, which, according to self-determination theory, may motivate employees to use PHW programs. This use of programs would in turn predict positive employee and organizational outcomes. Therefore, we argue that organizational trust may act as a mechanism by which PHW programs lead to important organizational outcomes in that they create the right environment for employees to utilize such programs.

Specifically, based on the PATH model (Grawitch et al., 2006), we hypothesized that organizational offerings of PHW practices would be associated with positive employee and organizational outcomes. Second, extending the PATH model, we expected organizational trust and employee use of PHW programs to produce indirect effects in these relationships. Specifically, we hypothesized that organizational offerings of PHW will predict increased organizational trust, which in turn will predict increased use of PHW, which ultimately will predict greater positive employee and organizational improvements.

Method

Procedure

Convenience sampling was used to recruit participants from October 2020 to April 2021. The first author reached out to consulting psychologists in her professional network who recruited organizations to participate. Some of these organizations had previously received consulting from these psychologists and others were network connections of the consulting psychologists and first author. They represented a variety of industries and types (e.g., manufacturing, restaurant/hospitality, community service, clinical services; for profit, nonprofit, and government). Business leaders (e.g., CEOs, HR directors) were solicited via an email template about the study. They were informed that organizations with a minimum number of participating employees (10 employees or 30%, whichever was greater) would be given a free feedback report with an overview of their employees’ responses and research on psychologically healthy workplaces. Participating organizations sent their employees an email with a SurveyMonkey link unique to the organization created by the researchers, which led to the informed consent and instructions for completing the anonymous survey (e.g., complete the survey in one setting). This study was approved by an institutional review board.

Participants

Participants included 362 employees from 11 organizations in the Southeast and Midwest United States (response rate: overall = 28%; M = 49%; SD = 24%; range = 10% - 86%). Participating organizational industries included 2 manufacturing (8% of participants), 1 restaurant/hospitality (6%), 5 nonprofit community service (36%), 1 clinical services (2%), 1 legal services (2%), and 1 county government (52%). Five organizations had ≤ 50 full-time employees (EEs; 8% of participants), two organizations had 50–100 EEs (21%), and three organizations had > 100 EEs (76%). One participant who was missing significant amounts of data was removed from analysis. Participants were 56% women, 34% men, 1% nonbinary, and 6% preferred not to answer. Participants were White (68%), African American (10%), Hispanic or Latinx (6%), multiple races or ethnicities (1%), Asian (< 1%), another race (< 1%), Indigenous (0.5%), and 9% preferred not to answer. Ages ranged from 19 to 80 (M = 44.93, SD = 13.12). Tenures ranged from less than 1 year to 46 years (M = 9.93, SD = 9.69). Most were full-time employees (92%), 8% were part-time, and some had management or supervisor responsibilities (47%).

Measures

Organization’s Offering of Psychologically Healthy Workplace Programs

Workers’ perceptions of their organization’s offering of PHW practices was assessed with eight items from the Trust Building Survey© (Gilbert & Lowe, 2020; e.g., “My employer promotes work–life balance” [work–life balance], “My employer promotes and supports employee health, safety, and well-being” [health and safety]) rated on a 1 = strongly disagree to 5 = strongly agree scale. As organizational resources and human resources practices (e.g., job crafting, compensation-based schemes, training, career supporting activities, performance appraisals) do not tend to vary in their relationship to employee well-being or organizational performance (Nielsen et al., 2017), organizational offerings was treated as a single construct. All items were averaged for each participant, where higher scores meant increased perceptions of organizational offerings, α = .93.

Organizational Trust

Many measures of organizational trust only include items about trust in a manager (e.g., Huang et al 2021; Timming, 2012). We wanted to encapsulate both trust in direct supervisors, organizational leaders, and trust in the entire organization. Therefore, organizational trust was assessed using a four-item measure created by the researchers (Keim et al., 2020). Participants responded to items (e.g., “I trust my supervisor,” “I trust my organization”) on a 1 = strongly disagree to 5 = strongly agree scale. All items were averaged to create a mean organizational trust score for each participant, where higher scores meant greater organizational trust. To test the convergent validity of this measure, we also included other measures of trust. Specifically, we included a single-item measure of trust from the Trust Building Survey (TBS; Gilbert & Lowe, 2020), which stated, “Employees and management trust one another.” This single item has been shown to be a critical feature of workplace psychological health and safety and is correlated with the 13 psychosocial factors in the National Standard of Canada for Psychological Health and Safety in the Workplace (Gilbert & Lowe, 2020). Our organizational trust composite correlated at r = .76, p < .001, with the TBS single item, demonstrating that it converged strongly and as expected. We also included four items from Mayer and Davis (1999) and three items from Stanley et al. (2005) to assess trust in management. Our composite measure of trust was significantly related to these two other measures of trust (r = .62, p < .001 and r = .64, p < .001, respectively). Moreover, our measure of trust demonstrated good internal reliability in this study, α = .87.

Employee’s Use of Psychologically Healthy Workplace Programs

Employee use of PHW programs were assessed with seven items that reflect broad organizational resources that are commonly available to employees (Day et al., 2014; e.g., “using training and development resources provided by my employer” [employee growth and development]; “receiving rewards or recognition for my efforts at work” [employee recognition]). Employees were asked if these happened more or less often during the pandemic. Response options for the items ranged from 1 = significantly decreased, 3 = stayed the same, to 5 = significantly increased. As employees use of programs are uniformly associated with employee outcomes such as well-being (Nielsen et al., 2017), all items were averaged to create a mean employee use score for each participant, where higher scores meant more use of programs offered by the organization, α = .80.

Outcomes

Positive employee outcomes was measured with four items created to reflect facets of outcomes from the PATH model (Grawitch et al. 2006). Specifically, we measured stress, motivation, satisfaction, and work–life conflict (e.g., “Experiencing work-related stress,” “Having conflicts between my work and personal demands”) in terms of how they did or did not change over the pandemic. Other investigations have used similar composites to reflect changes in employees over the pandemic (Das & Pattanayak, 2023). Response options ranged from 1 = significantly decreased, 3 = stayed the same, to 5 = significantly increased. These four items produced a Cronbach’s alpha of .71. Thus, all four items were averaged to create a mean employee outcomes score with higher scores indicating more positive employee outcomes.

Organizational outcomes were measured with three items created by the researchers to reflect organizational outcomes from the PATH model (Grawitch et al. 2006). These included “being productive at work” and “maintaining high quality standards in my work” (job performance); “being likely to leave the organization in the next year” (turnover intention). Employees were asked if each of these outcomes happened more or less often during the pandemic. Response options for the items ranged from 1 = significantly decreased, 3 = stayed the same, to 5 = significantly increased. All items were averaged to create mean organizational outcomes score for each participant with higher score meaning more positive organizational outcomes, α = .68.

A confirmatory factor analysis showed support for our measurement model (χ2 = 950.04, df = 289, χ2/ df = 3.29; GFI = 0.97; RMSEA = .079; SRMR = .071) with all item parameter estimates significantly loading on their perspective factor at p < .001.

Results

Means, standard deviations, and bivariate relationships among the variables appear in Table 1. As expected, all variables were significantly positively correlated with one another. Collinearity diagnostics conducted on the full models indicated that multicollinearity was not an issue in either model (organizational offerings, tolerance = 0.31, VIF = 3.20; organizational trust, tolerance = 0.31, VIF = 3.22; employee use, tolerance = 0.72, VIF = 1.40).

Table 1.

Descriptive Statistics and Correlations

Note: N = number of participants; SD = standard deviation; PHW = psychologically healthy workplace practices
* p < .001

To test our hypothesis, we conducted path analyses in jamovi (2022) version 2.3. In these models, organization’s offering of PHW programs was entered as the predictor, organization trust as the first mediator, and employee’s use of PHW programs as the second mediator. Employee outcomes and organizational outcomes were entered as separate dependent variables. As predicted, organizational offerings, organizational trust, and employee use of PHW programs were significantly related to employee outcomes, (χ2 =644, df = 6, χ2/ df  = 107.33; CFI = 1.00) and organizational outcomes (χ2 = 630, df = 6, χ2/ df  = 105; CFI = 1.00).  As predicted, organizational trust and employee use produced significant indirect effects between organization’s offering of PHW programs and employee outcomes, 0.05 (SE = 0.02) 95% CI[0.01, 0.09] and between organization’s offering of PHW programs and organizational outcomes, 0.09 (SE = 0.03), 95% CI[0.03, 0.14]. Specifically, organization offering of PHW programs predicted higher organizational trust, which in turn predicted more employee use of PHW programs, which ultimately predicted more positive employee and organizational outcomes. Statistics for these relationships appear in Figure 1.

Figure 1.

Path Analysis of the Associations Among Organizational Offerings of PHW, Organizational Trust, Employee Use of PHW on Employee and Organizational Outcomes

Note: PHW = psychologically healthy workplace practices
***p > .001, **p > .01, *p > .05

Discussion

This study aimed to determine if PHW programs can offer organizations concrete ways to stave off the negative effects of major organizational change and uncertainty. Results support the validity of the PATH model. Organizational offerings and increased use of PHWs during the height of the COVID-19 pandemic was associated with greater positive employee and organizational outcomes. Specifically, the increase in use of PHW programs during the pandemic was significantly related to lower levels of employee stress, less work–life conflict, and greater employee motivation and job satisfaction, as well as greater job performance and fewer turnover intentions. In line with previous research, actively involving employees in important decision making, recognizing them for their work, investing in their development, creating healthy and safe work environments, and providing work–life balance policies during times of organizational uncertainty seem to be important (e.g., Grawitch et al., 2015; Kelloway & Day, 2005; Morgan & Zeffane, 2003).

This study makes two important additional contributions. First, it establishes the importance of employees using well-being and PHW programs. It may not be enough for employers to offer programs or for employees to perceive such programs exist; employers must create cultures where employees know they can use them, and do. Second, this study identified a novel mechanism by which organizational offerings may lead to employee use organizational trust. In the current sample, the more employees perceived that their organization offered PHW practices, the more they trusted their organization, and the more they used those programs. This suggests that organizational trust may be a manifestation of an organization’s culture, strategy, and values to ensure success of PHW programs.

Practical Implications

The results of this study offer organizations practical solutions for building a healthy workplace culture: build and maintain trust. Leaders can create a culture of trust by increasing communication—especially during times of uncertainty—and sharing information enthusiastically and optimistically (e.g., Chen & Sriphon, 2021). Communication around PHW programs could include leaders ensuring access, increasing awareness, ensuring convenience, integrating with other programs, reinforcing appropriate behaviors, and articulating the value of such programs (Grawitch et al., 2006; Parchman & Miller, 2003). During the COVID-19 pandemic, supervisors who used meaning-making language to reinforce the values, culture, and mission of an organization; empathetic language to show care and concern; and direction-giving language to clarify responsibilities and expectations saw increases in employees’ organizational trust (Men et al., 2022), offering specific ways communication can build trust during times of crisis.

Leaders who engage in servant and ethical leadership behaviors produce greater perceptions of affective trust, perhaps due to the ethical, fair, communicative, and deferential leadership style and modeling of ethical behavior and trust as a central tenet to servant leadership (Joseph & Winston, 2005; Legood et al., 2021). Organizations that would like to increase trust may aim to do so by training and equipping managers and leaders with the skills of ethical and servant leaders or selecting leaders who possess these skills (e.g., listening, empathy, stewardship, foresight, building community; Joseph & Winston, 2005).

Limitations and Directions for Future Research

The data in this study were cross-sectional and all collected by self-report surveys, both of which may have contributed to the high correlations among some of the variables herein. For example, a meta-analysis of prior research revealed that the magnitude of the relationship between organizational resources and employee outcomes did not significantly differ between cross-sectional and longitudinal studies but was stronger in cross-sectional designs (Nielsen et al., 2017). Furthermore, common method variance due to the surveys being self-report may have also inflated correlations. Second, because the data were collected at a single time point, neither causation nor the temporal precedence of any variable in the model should be inferred from this study alone. However, there is some support of the temporal nature of these variables in longitudinal studies (e.g., flexible work arrangements linked to increases in organizational trust, Stavrova et al., 2023; organizational trust linked to future improvements in psychological and physical health, Özer et al., 2022). This study lays a crucial foundation for future longitudinal or experimental work testing the overall model as well as individual links within it. Third, this study’s variables were employees’ perceptions of PHW offerings and not explicit offerings. Although employees’ perceptions of availability of PHW programs are often the measure used (e.g., Grawitch et al., 2007), future research could assess both employee perceptions and explicit offerings in organizations to ensure alignment.

The method of convenience sampling used in this study—which involved inviting organizational leaders from professional networks to participate—may have led to self-selection bias. Participating organizations and their employees who were interested in psychologically healthy workplace research may have also been more likely to participate. Furthermore, social desirability may have prevented potential participants from participating if they did not want to admit their use of flexible workplace arrangements or other types of assistance. Organizations drawn to a study on PHW and receiving a free feedback report may be more concerned about or invested in their employees and therefore more likely to offer PHW programs. Therefore, the sample in this study may not be representative of all workplaces.

Participants were mostly White women in white-collar jobs, many supervisors, potentially impacting generalizability. For example, men have been shown to take less advantage of PHW practices such as employee assistance programs (Matthews et al., 2021) and flexible work arrangements (Ewald et al., 2020). However, rather than being the result of lower organizational trust, perhaps such hesitance is the result of masculine gender roles encouraging toughness (Brooks & Ling, 2020). Moreover, women and men of color may be less likely to access employee assistance, workplace wellness initiatives, and flexible work arrangements (Beck et al., 2016; Brooks & Ling, 2020), potentially for fear of being viewed as not being dedicated to work (Blake-Beard et al., 2010). Blue-collar workers may be less likely than white-collar workers to engage in workplace wellness (Damen et al., 2023) and to face different barriers for accessing employee assistance (Matthews et al., 2021). Finally, almost half of the respondents had some supervisory or managerial responsibilities, which may have influenced their perceptions of PHW programs in that they may have had a greater awareness of them. Future research should test this model in more diverse samples and with more front-line employees.

Finally, to entice organizations and employees to participate during a stressful time for many (i.e., COVID-19 pandemic), we intentionally kept our measures simple and lean. We did not use other, longer measures of our constructs. Although we offer evidence of the reliability and validity of our measures, future research could include other measures and/or additional constructs (e.g., organizational commitment, absenteeism) to further test the PATH model.

Despite these limitations, these results offer a fascinating and useful insight into how a variety of organizations were operating at the height of the pandemic. During a time of incredible stress and uncertainty, employees who perceived a greater offering of PHW programs saw better outcomes for themselves and their employers. This was at least partially explained by the idea that these offerings of PHW programs was associated with increases in organizational trust and PHW use, which in turn predicted positive employee and organizational outcomes. Organizational leaders and occupational health psychology researchers have a duty to help workers, and our society, by championing structural policies that reduce employee stress and increase health and well-being (Shoss, 2021). The results of this study offer organizations practical solutions (i.e., increase trust) when they manage the next inevitable major dilemma (Shoss, 2021), whether that be a merger, financial crisis, societal uprisings, or major organizational change.

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