Social exchange theory is one of the most influential conceptual frameworks for understanding behaviour in organizations (Cropanzano & Mitchell, 2005) and a dominant theoretical framework to understanding the employee-organization relationship (Coyle-Shapiro & Conway, 2004). The versatility of its explanatory power reaches beyond the employee-organization relationship to include leadership (Liden, Sparrowe & Wayne, 1997), organizational justice (Colquitt, Scott, Rodell, Long, Zapata, Conlon & Wesson, 2013; Rupp, Shao, Jones & Liao, 2014), workplace exclusion (Scott, Restubog & Zagenczyk, 2013) and the impact of the Dark Triad (machiavellianism, narcissism and psychopathy) on work behaviour (O’Boyle, Forsyth, Banks & McDaniel, 2012). A common although not exclusive focus of social exchange theory is to understand relationships, underpinning mechanisms and associated outcomes. In this chapter, we highlight the role of trust in social exchange relationships as it applies to the employee-organization relationship (EOR).
Our chapter is organized as follows. First, we review the historical development of social exchange theory starting with its roots in the work of Malinowski (1922) and Mauss (1954) and ending with contemporary developments highlighting the implications of a social exchange perspective to understanding trust. Then, we examine current EOR frameworks that draw on social exchange theory: psychological contracts (PC), idiosyncratic deals (i-deals), perceived organizational support (POS) and employment relationships (ER) and review the empirical evidence on the role of trust in these EOR frameworks. Finally, we discuss the theoretical implications for our understanding of trust in the EOR.
Although there is an agreement that trust is an important aspect of organizational life, a number of definitions have been put forward to capture the meaning of trust such as ‘confident positive expectations’ (Lewicki et al., 1998) or a ‘willingness to rely’ (Doney, Cannon & Mullen, 1998). Mayer, Davis and Schoorman (1995) define trust as ‘the willingness of a party to be vulnerable to the actions of another party based on the expectations that the party will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party’ (p. 712). Trust, in social exchange terms occurs when the donor trusts the recipient to reciprocate a benefit – it is trust that allows the donor to be vulnerable to non reciprocation and herein lies the risk. Rousseau, Sitkin, Burt and Camerer (1998) note that for trust to arise, risk and interdependence are needed. The source of the risk is the uncertainty of the other’s intentions and actions, and the interdependence arises from the fact that interests of one party cannot be achieved without relying on the other (Rousseau et al., 1998).
As this historical review will reveal, the development of social exchange theory and its use weaves its way through a number of disciplines, starting with anthropology and ending within the mainstream management field as reflected in its prominence in Academy of Management Journal as a micro theory (Colquitt & Zapata-Phelan, 2007) and one of the most often evoked theories in the Journal of Applied Psychology (Colquitt, Baer, Long & Halvorsen-Ganepola, 2014).
The roots of social exchange theory can be traced back to the early anthropological work by Malinowski (1922) in his classical study of exchange (‘Kula’) among the natives of the Trobriand Islands. Malinowski (1922) outlined the key principles of ‘Kula’ (exchange): (a) it is ongoing ‘once in the Kula, always in the Kula’ (p. 83), (b) it requires mutual trust; (c) the bestowing of a gift needs to be repaid with ‘an equivalent counter-gift after a lapse of time, be it a few hours or even minutes though sometimes as much as a year or more may lapse between payments’ (p. 95); (d) the equivalence of the returning gift is at the discretion of the giver and it cannot be enforced by coercion. Although, the opening gift is given spontaneously, the counter-gift is given under pressure of fulfilling an obligation. Two features of Malinowski’s work on exchange are noteworthy. First, the idea of equivalence in exchange is critical to exchange relationships as when two equivalent gifts are exchanged ‘these two have married’ (p. 356). The emphasis given to equivalence is exemplified by the idea of intermediary gifts – when an equivalent gift cannot be exchanged, a gift of lesser value is given to ‘fill the gap’ until such time as an equivalent gift can be returned. Second, this exchange of gifts (if one is in the Kula) lasts a lifetime and there is a symbolic significance to the giving of gifts which remain in the transitory possession of the receiver – gifts are given and taken in an ongoing and never-ending manner.
In the seminal book The Gift by Mauss (1954), he argues that there is no such thing as a free gift. Rather, he outlines the system of gift exchange called ‘potlatch’ that is governed by three obligations: to give presents, to receive presents and to reciprocate presents received. All three obligations carry constraints and burdens – ‘a gift is received “with a burden attached” ’ (Mauss, 1954, p. 41) and the essence of potlatch is the obligation to reciprocate. So important is this to ‘potlatch’ that Mauss (1954) in his study of tribes notes ‘the punishment for failure to reciprocate is slavery for debt’ (p. 42), while reciprocation of a gift needs to be given with interest. Consistent with Malinowski (1922), Mauss emphasizes the role of reciprocal action, drawing upon a Mauri proverb ‘give as much as you take, all will be very well’ (p. 71).
This early anthropological work on tribes examining economy of exchange through gift giving highlights several aspects of the role of trust. First, the gift giver is trusting that a counter gift will be returned; second, trust is lost if this does not occur. As Mauss (1954) notes, ‘one loses face for ever if one does not reciprocate’ (p. 42); and, third, when a counter gift of equivalent value is return, it facilitates the development of trust. Although these gifts do not necessarily have economic value but are symbolic, the signals sent by the gift reflect the gift giver’s trustworthiness. Trust is generated with an ongoing cycle of giving and receiving of at least equivalent gifts within a system where sanctions such as loss of rank and status within the tribe are imposed for trust violations.
Although Homans (1958) used the term social exchange, it was Blau’s (1964) work that spearheaded the conceptual development of social exchange theory. He was the first to precisely differentiate different types of exchange relationships and explicitly discuss trust. Prior to this, Homans (1958), Thibaut & Kelly (1959) and March and Simon (1958) provided seminal contributions.
Homans (1958) drew attention to social behaviour as exchange in the context of individual interactions in groups. He defined social behaviour as ‘an exchange of goods, material goods but also non-material ones, such as the symbols of approval or prestige’ (p. 606). Individuals strive for balance in their exchange relationships and seek to maximize profit (rewards less cost) compared to others in their group. As Homans (p. 606) notes, ‘persons that give much to others try to get much from them, and persons that get much from others are under pressure to give much to them’. Thibaut and Kelley (1959) also examine individual interactions in a small-group context making predictions about the consequences for the individual in terms of costs and rewards. An individual will be more likely to remain in a dyadic relationship when his/her rewards/costs combination is more favourable than the comparison level of alternatives. The higher the outcomes (compared to the alternatives), the more dependent the individual is on the relationship. If an individual’s outcomes fall above the comparison level (i.e. what he/she believes they deserve), an individual will judge the outcome to be attractive and satisfying; if the outcomes fall below, the outcomes will be judged as unattractive and unsatisfying. Further, an individual will leave the relationship when his/her outcomes drop below the comparison level of alternatives.
March and Simon (1958) were the first to examine exchange relationships in the context of employee-organization in which the organization offers inducements in return for employee contributions. In explaining why organizational members continue their participation in the organization, March and Simon (1958) argue that the organization needs to provide inducements that are greater in value compared to the contributions members are required to make. These contributions, in turn, provide the basis and affect the extent to which the organization can offer those inducements. Therefore, the organization can continue as long as the contributions of members are sufficient to provide the inducements that are large ‘enough’ to elicit those contri butions. The contingent interplay between the inducements offered by the organization and contributions elicited from employees is made explicit.
Neither Homans (1958) nor March and Simon (1958) explicitly discussed reciprocity, but it is implicit in their description of exchange. Gouldner (1960) in his seminal work on the norm of reciprocity was the first to define the concept although it had been used prior to this. He suggests that the norm of reciprocity is universal and makes two demands of individuals: ‘(1) people should help those who have helped them, and (2) people should not injure those who have helped them’ (Gouldner, 1960 p. 171). The obligation to reciprocate is contingent upon the value of the benefit received such that the ‘debt is in proportion to and varies with – among other things – the intensity of the recipient’s need at the time the benefit was bestowed (‘a friend in need …’), the resources of the donor (‘he gave although he could ill afford it’), the motives imputed to the donor (‘without thought of gain’) and the nature of the constraints which are perceived to exist or be absent ‘he gave of his own free will’) (Gouldner, 1960, p. 171). According to Gouldner (1960), when one party gives a benefit, an obligation is created and the recipient is indebted to the donor until such point as he/she repays the benefit. Echoing the sentiment of Mauss (1954), Gouldner (1960) states ‘it is morally improper, under the norm of reciprocity, to break off relations or to launch hostilities against those to whom you are still indebted’ (p. 175).
Malinowski (1922) discussed equivalence in gifts and this idea was more precisely addressed by Gouldner (1960) who differentiated between heteromorphic and homeomorphic reci procity – the former captures the exchange of different things that are equal in value as defined by the ex change partners while the latter captures exchanges that are identical with regard to what is ex changed or the circumstances under which the exchange occurs. The function of the norm of reciprocity is twofold: first, it acts as a starting mechanism to allow an exchange relation ship to develop if the recipient of a benefit reciprocates; second, once the norm of reciprocity has been established between the two parties, it provides the basis for each party’s confidence that benefits will indeed be reciprocated. Thus, the norm of reciprocity acts as a starting mechanism to develop trust and a stabilizing mechanism to maintain or enhance trust.
While Gouldner’s (1960) work elaborates and details what remained undefined in prior work concerning reciprocity, Blau (1964) did the same when it comes to exchange relationships, where he distinguished between social and economic exchange. Blau (1964) describes economic exchange, as one where the exchange is specified and the method used to assure that each party fulfils its specific obligations is the formal agreement upon which the exchange is based, eliminating the need for trust. In contrast, social exchange involves unspecified obligations – ‘favors that create diffuse future obligations, not precisely specified ones, and the nature of the return cannot be bargained about but must be left to the discretion of the one who makes it’ (p. 93). These relationships take time to develop as the nature of the benefits exchanged start off small and expand to include socioemotional resources – this allows for trust to develop over time. As Blau (1964) notes, ‘… doing a favour demonstrates trust in another; the other’s reciprocation validates this trust as justified’ (p. 107). Trust is created and trustworthiness developed through the adherence of the exchange partners to the norm of reciprocity as the benefits exchanged expand in nature and value over time. According to Blau (1964), the timing of reciprocation is important – ‘posthaste reciprocation of favors, which implies a refusal to stay indebted for a while and hence an insistence on a more businesslike relationship is condemned as improper’ (p. 99) as this would demonstrate ingratitude. Thus, remaining obligated to another party for an appropriate time facilitates the development of trust as it signals a long-term view of the relationship.
These seminal works build upon and extend the early anthropological work regarding the role of trust in social exchange relationships. First, reciprocity is the key to the development of trusting relationships – the donor takes a risk that the beneficiary will not reciprocate while concurrently signalling their trust in the beneficiary to reciprocate. Second, the reciprocation of a benefit helps the beneficiary demonstrate their trustworthiness. Third, the role of time between exchanges highlighted by Malinowski (1992) was further developed by Blau (1964) who argued that remaining obligated to another facilitates the establishment of trust. Finally, analogous to climbing a ladder one rung at a time, trust evolves slowly as the value of the resources exchanged increases and the parties demonstrate their trustworthiness in terms of reciprocation. Trust, therefore, is predicated on the actions and reactions of the parties in an exchange relationship.
Emerson (1962) introduced the idea of power dependence in social relations and argues that ‘power resides implicitly in the other’s dependence’ (p. 32). His approach to social exchange accentuates the role of power and dependence aptly titled as power-dependence theory. Emerson (1972a and b) argues that exchanges involve mutual dependence where the parties are dependent upon each other for valued outcomes; benefits obtained are contingent upon benefits received in the exchange. In essence, Emerson (1972a) states that the extent to which B is dependent upon A is contingent upon the value of the benefits A provides and B’s access to alternatives, such that the greater the value attached to the benefits A provides and the fewer alternatives available to B, the greater B’s dependency on A. The less the dependency of one party on another, the greater the power structural advantage. Emerson (1972a) also argued that the initiation of the exchange varies directly with dependence – a party is more likely to initiate exchange with another with whom they are more (rather than less) dependent upon.
Emerson (1976, 1981) distinguished between four forms of social exchange: productive, negotiated, reciprocal and generalized. Productive exchange involves the coordination of efforts or combining of resources to generate a joint good – all parties contribute to and benefit from this collective endeavour. Lawler, Thye and Yoon (2000) give an example of a group of unions coming together on a common approach to negotiate with the city government. Negotiated exchange involves two parties directly and jointly agreeing the terms constituting a discrete transaction. In reciprocal exchanges, each party’s contribution to the exchange is separately performed and non-negotiated, governed by direct reciprocation. Generalized exchanges are indirect in that the giving and receiving of benefits among members of a group as the recipient of a benefit may not reciprocate the source – A provides a benefit to B who reciprocates C and D reciprocates A. In this type of exchange, repayment of a benefit is stipulated but the target of the reciprocal act can be any member of the group. Here, we limit our attention to negotiated and reciprocal exchange as these two types of exchange have contrasting implications for the role of trust.
Molm (1994) outlined the key differences between negotiated and reciprocal exchanges along two dimensions: (a) the contingency of each party’s outcomes on the joint action or the other party’s actions and (b) the party’s information about the other’s reciprocity. In negotiated exchanges, each party’s outcomes depend on the joint actions of them and the other party for bilateral benefits, and both parties know what they are getting and giving, having negotiated an agreement. In contrast, in reciprocal exchanges, each party’s outcomes depend exclusively upon the other party and benefits can flow unilaterally (benefits given may not be reciprocated) without knowledge as to whether reciprocity will occur and if it does, when it will occur. Molm (2003) subsequently highlighted timing of inequality as another key difference. In negotiated exchanges, each transaction provides equal or unequal outcomes for the parties but in reciprocal exchange, the extent of equality or inequality is only known over the course of time by the frequency and value of reciprocity. Finally, Molm (2003) noted that uncertainty in reciprocity varies between negotiated and reciprocal exchange. She argues that reciprocal acts can be compared in terms of equivalence on the following dimensions: function (good or harm), magnitude of value and probability/frequency of occurrence. In negotiated exchanges, the only uncertainty pertains to the magnitude of value that each party receives as it is unlikely that a party would negotiate good for harm, and the probability of reciprocity is not an issue in a bilateral negotiation of exchange. In reciprocal exchanges, there is uncertainty in two dimensions: the probability of reciprocity happening and the magnitude of its value. Finally, although both forms of exchange involve risk, the nature of this risk is different. In reciprocal exchange, there is the risk of non-reciprocation – the giving of a benefit without receiving any benefit in return (Molm, 2003). In negotiated exchange, the risk is what Molm (2003) terms ‘risk of exclusion’ which reflects the failure to reach an agreement.
Molm and her colleagues have undertaken a substantial body of experimental research to examine the differences between negotiated and reciprocal exchange, and, here, we focus on a few that are germane to our review of social exchange. Molm, Takahashi and Peterson (2000) using an experimental design find that trust and affective commitment are stronger under reciprocal exchanges than negotiated exchanges. The authors argue that risk is a necessary condition for the development of trust – the vulnerability to exploitation provides fertile ground for the growth of trust. It also provides the opportunity for the receiving party to demonstrate their trustworthiness in terms of whether they reciprocate or not. Molm (2003) argues that the act of reciprocation is in and of itself more important than the magnitude of its value and this may be explained by consistent reciprocity being a mechanism to reduce uncertainty and make risky reciprocal exchanges more predictable. Further, Molm (2003) argues that reciprocation may provide expressive benefits (i.e. feeling valued) that may substitute for reduced value of the benefits. Molm, Takahashi and Peterson (2003) find that although negotiated exchange appears fairer as it gives parties greater control over their outcomes and greater voice, experimental findings support the contrary – negotiated exchange partners were deemed less fair than reciprocal exchange partners and this held true across equal and unequal exchanges. The authors argue that the sheer act of negotiating an exchange accentuates the salience of the conflict of interests that in turn triggers self-serving attributions (ascribing unfavourable motives and traits to the other party) that increase perceived unfairness.
From a social exchange lens, trust is conceptualized as an expectation that an exchange partner will behave benignly and not exploitatively based on inferences about the partner’s traits and intentions. In economic exchange (Blau, 1964) or negotiated exchange (Emerson, 1972a), the agreement reached provides assurance that both parties will fulfil the terms and therefore ‘as long as an “assurance” structure is present, there is little opportunity for trust to develop’ (Molm et al., 2000) as uncertainty and risk have been minimized. As the early contributors to social exchange highlight, the initial offer of a favour carries the greatest risk and uncertainty as the donor risks exploitation (i.e. the favour will not be reciprocated) and the risk of exclusion (the beneficiary rejects the offer to enter into a relationship). Therefore, the party who initiates the exchange is willing to be vulnerable to the other party and in providing a benefit is demonstrating trust in the other party that they will indeed reciprocate. In the absence of assurance, social exchange relationships require trust that benefits will be reciprocated and obligations discharged.
Molm et al. (2000) note that because of the greater risk for exploitation in reciprocal exchanges as a result of the absence of assurances, there is a greater opportunity for the exchange partners to demonstrate trustworthiness. Therefore, vulnerability to risk where the opportunity to exploit is turned down provides fertile ground for trust to develop; reciprocity turns on the development of trust, which should escalate with frequent and stable exchange interactions. Consequently, a social exchange relationship engenders trust, obligation and gratitude, and over time leads to a relationship characterized by interdependency, mutual trust and bonding (Blau, 1964).
In tracing the development of social exchange theory up to this point, two observations can be made in terms of trust. First, trust is situationally derived based on the exchange interactions between the parties. This view downplays the role of personality-based, institution-based and cognition-based trust (McKnight, Cummings & Chervany, 1998) to argue that trust results from the adherence to the norm of reciprocity in exchange relationships. Second, trust develops gradually over time, beginning with low-value benefits and escalating to high-value benefits as the parties demonstrate their trustworthiness through reciprocity. A recent development complements this view by exploring the role of anchoring events in quickly altering the nature of the relationship with implications for trust and distrust.
Ballinger and Rockmann (2010) examine how ‘anchoring events’ can fundamentally alter social exchange relationships and challenge the assumption that social exchange relationships develop slowly. These anchoring events can trigger ‘quick trust’ if positive or distrust if negative. The authors examine the role of highly memorable exchanges in setting the basis for the subsequent relationship which contrasts with the tenets of social exchange theory that ‘relationship development is not a matter of a single stimulus-response. It is more analogous to climbing a ladder’ (Cropanzano & Mitchell, 2005, p. 890). Rather, as Ballinger and Rockmann (2010) state, ‘relationships can reach different forms via a “chute” – a punctuated process where the rules for future exchange are quickly, dramatically and durably changed by the outcome of a single event’ (p. 374). An anchoring event is one where an individual is highly dependent upon another for a resource needed to achieve a central goal, the outcome positively or negatively deviates from an expectation that is based on past relationship exchanges and the donor is judged to have intended and controlled this outcome (Ballinger & Rockmann, 2010). Such an event triggers an affective response (anger, gratitude), and the magnitude and direction of the affective reaction is encoded in memory that an individual remembers and interprets the target’s future behaviour so as to support the remembered event.
When an anchoring event occurs in the context of a reciprocity-based relationship, an individual will update their preferred rules for future exchanges and adjust their expectations from their exchange partner (Ballinger & Rockmann, 2010) such that a negative anchoring event will trigger distrust and lead an individual to select a rule that provides them with greater protection – to maximize their own outcomes or revenge. Because these have negative implications for the other party, Ballinger and Rockmann (2010) view these as negative nonreciprocal states. After a positive anchoring event, the trust created will facilitate an individual selecting a rule that favours the other party, such as altruism, and this is termed a positive nonreciprocal state. The authors propose that anchoring events are more likely to occur early in reciprocal relationships and as the relationship becomes more positive (or negative), an anchoring event that is positive (negative) is more likely to occur. In a positive relationship, the individual sees the target as responsible for good actions which makes it less likely that any negative behaviour will be attributed internally to the target. This in turn makes the occurrence of a negative anchoring event less likely in a positive relationship. On the contrary, in a negative relationship, any disappointing outcome will be attributed internally to the target and as the individual is more vigilant, it is likely that further negative anchoring events will occur (i.e. the straw that breaks the camel’s back) and trigger the relationship into a negative nonreciprocal state.
When a negative nonreciprocal relationship develops as a consequence of an anchoring event (in contrast to a gradual process), the potency of the anchoring event, the defining memory, will bias actions and interpretations, and the difficulty facing the target to demonstrate their trustworthiness will make it less likely that a positive anchoring event will revert the relationship to a reciprocal one (Ballinger & Rockmann, 2010). A negative anchoring event is more likely to shift a positive nonreciprocal relationship to a different rule if the positive state was reached through a prior anchoring event (a positive one) because a gradual development of a positive nonreciprocal relationship is more immune to transgressions as a result of the accumulation of investment in that relationship.
This view extends prior work on the implications of social exchange relationships for the role of trust. First, Ballinger and Rockmann (2010) complement the traditional social exchange view of trust (develops gradually and slowly over time) by considering the impact of an ‘anchoring event’ on the development of ‘quick trust’ whereby the effect of the anchoring event is so memorable that it jump starts the creation of trust. These intense events or high-stake exchanges, when positive, are likely to lead to high levels of trust in some part triggered by the recipient’s gratitude towards the beneficiary. Thus, trust can develop quickly or slowly in social exchange relationships contingent upon the nature of the initial exchanges (significant or small). It is the nature of the exchanges that determine trust levels and small initial exchanges will result in the gradual development of trust whereas highly significant initial exchanges will result in express levels of trust.
Second, Ballinger and Rockmann (2010) implicitly point to the difference in the fragility/ robustness of trust generated by the two different social exchange pathways. The authors argue that the way the relationship develops (gradual versus anchoring event), and implicitly the basis of trust, determines whether the relationship is more or less immune from transgressions. A gradual development and building of trust is likely to withstand a negative anchoring event but the relationship built upon a positive anchoring event is more likely to change as a result of a subsequent negative anchoring event. Therefore, relationships where trust develops based on positive anchoring events are likely to be based on fragile trust whereas relationships based on the gradual development of trust are likely to be more robust, all things equal.
Finally, although distrust is rarely discussed in the context of social exchange relationships, negative events happen even in the most positive of relationships (Dulac, Coyle-Shapiro, Henderson & Wayne, 2008). Ballinger and Rockmann (2010) explain how negative social exchange relationships can develop through repeated negative anchoring events in which the focal individual develops distrust in their exchange partner as a way of protecting their own interests, and the relationship shifts to a non-reciprocal negative one. The authors argue that it will be difficult to move this relationship to a reciprocal one and the best that can be hoped for is ‘an “uneasy peace” where the individual acts solely to maximise and protect his or her own interests without any concern for the outcomes (benefits or damages) to the target’ (p. 383). This is likely to lead to a relationship based on distrust defined as ‘confident negative expectations regarding another’s conduct’ (Lewicki, McAllister & Bies, 1998). Given its negative deviation from prior expectations, a negative anchoring event is likely to lead to perceptions of betrayal (as demonstrated by the empirical evidence on psychological contracts) which as Lewicki et al. (1998) argue is likely to provide not only the foundation for distrust but also a negative framing through which subsequent actions are evaluated, culminating in paranoid cognitions. Should the exchange partner attempt to act benevolently, this is likely to be interpreted by the focal individual through a negative frame of reference and hence dismissed as manipulation, thereby making the reparation of distrust unrealistic. This fits in with what Bijlsma-Frankema, Sitkin and Weibel (2015) label amplification in the development of distrust.
In summary, social exchange theory provides two pathways through which exchanges may elicit trust – the traditional view that trust develops gradually over time as the exchanges increase in value and a contemporary view whereby an unexpected positive deviation from expectations in terms of the exchange can create a memorable anchoring event leading to the quick establishment of trust. These pathways are likely to affect the degree to which trust is fragile or robust in terms of stability. Finally, negative anchoring events can trigger a path of distrust as this event shapes how an individual interprets subsequent events/exchanges in that relationship.
Having cursorily traced the historical development of social exchange theory and the role of trust in social exchange theory, we now turn to examining current employee-organization relationship (EOR) frameworks that draw upon social exchange theory. We confine our review here to psychological contracts, idiosyncratic deals, perceived organizational support and employment relationships and exclude leader-member exchange (LMX) as it focuses on the relationship an employee has with their immediate supervisor rather than the organization. We also exclude organizational justice but recognize that Homans (1958) discussed distributive justice in his early work, and in the last decade, social exchange theory has risen in prominence to explain justice effects (Colquitt et al., 2013). As Rupp and colleagues (2014, p. 162) posit, ‘a key aspect of social exchange theory (as applied to justice theory) is that fairness drives social exchange’. However, we exclude it here because unlike the other EOR frameworks, it does not explicitly capture the relationship that may develop between employees and their employer even if it facilitates the development of high-quality social exchange relationships (Colquitt et al., 2013). In short, our inclusion/exclusion principle rests upon capturing the employee-organization relationship, drawing on social exchange theory with implications for trust in that relationship.
Although Argyris (1960) was the first to coin the term ‘psychological contract’, it was Rousseau’s (1989) seminal article that is credited with reinvigorating interest in psychological contracts and stimulating a body of research that shows no signs of slowing down. Rousseau (1989) defined the psychological contract as ‘an individual’s beliefs regarding the terms and conditions of a reciprocal exchange agreement between that focal person and another party. Key issues here include the belief that a promise has been made and a consideration offered in exchange for it, binding the parties to some set of reciprocal obligations’ (p. 123). MacNeil (1974) distinguished transactional and relational contracts and this distinction was incorporated into psychological contract theory. Transactional contracts involve highly specific exchanges that are narrow in scope; economic in focus, explicit and time bound (Robinson, Kraatz & Rousseau, 1994). In contrast, relational contracts are broader in focus, opened ended, involve the exchange of socio-emotional as well as economic resources, are characterized by trust and are implicitly managed (Rousseau, 1990).
A key aspect of psychological contract theory that has been heavily researched is the consequences of psychological contract breach and violation (and to a lesser extent fulfilment). Psychological contract breach, ‘the cognition that one’s organization has failed to meet one or more obligations within one’s psychological contract in a manner commensurate with one’s contributions’ (Morrison & Robinson, 1997), that can lead to feelings of violation, ‘an intense reaction of outrage, shock, resentment, and anger’ (Rousseau, 1989, p. 129). In contrast, psychological contract fulfilment, ‘the extent to which one party to the contract deems the other has met its obligations’ (Lee et al., 2011, p. 204), describes how well the organization fulfils the employee’s psychological contract. The underlying explanation for the consequences of psychological contract breach/violation and fulfilment, is the norm of reciprocity whereby employees positively/negatively reciprocate psychological contract fulfilment/breach. The perceived fulfilment of the psychological contract by the employer is likely to generate a perception among employees of employer trustworthiness while breach/violation is likely to trigger distrust in the employer.
‘I-deals refer to voluntary, personalized agreements of a nonstandard nature negotiated between individual employees and their employers regarding terms that benefit each party’ (Rousseau, Ho & Greenberg, 2006, p. 978). The principal characteristics of i-deals are that they are individually negotiated by either the employer or the employee, heterogeneous in that some of the terms are differentiated from what other comparable employees receive (i.e. especially provided), mutually beneficial so that both the interests of the employee and employer are served, and that they vary in scope from a single idiosyncratic element to an entirely different deal (Rousseau, 2005; Rousseau et al., 2006). Researchers argue that organizations use i-deals to recruit, retain and reward high performers; for employees, i-deals can signal their market value or the value an employer places on the individual employee (Rousseau et al., 2005, 2006; Rosen, Slater, Change & Johnson, 2013). Social exchange is used to explain the effects of i-deals on employee attitudes and behaviour because of their beneficial effect, and this should create an obligation to reciprocate (Anand et al., 2010; Liu et al., 2013; Ng & Feldman, 2012). For the focal employee, the receipt of an i-deal may generate trust although the implications, as discussed later, for co-workers may lead to the development of distrust.
Perceived organizational support (POS) captures an individual’s perception concerning the degree to which an organization values their contributions and cares about their well-being (Eisenberger, Huntington, Hutchison & Sowa, 1986). Organizational support theory (OST) posits that perceived organizational support triggers a social exchange process in which employees feel obligated to reciprocate the support that they have received (Kurtessis, Eisenberger, Ford, Buffardi, Stewart & Adis, 2017). As Rhoades and Eisenberger (2002, p. 698) note, ‘to the extent that both the employee and the employer apply the reciprocity norm to their relationship, favourable treatment received by either party is reciprocated, leading to beneficial outcomes for both’. As such, POS generates employee trust in the organization.
Building on the inducement-contribution model and exchange theory (Blau, 1964; March & Simon, 1958), Tsui et al. (1997) describe four approaches to the employee-organization relationship from the employer’s perspective. These four approaches capture different employer expectations about employee contributions and the inducements offered in return along two dimensions: the degree of balance/imbalance in each party’s contributions/inducements and whether the focus of these contributions/inducements is economic or social exchange. The quasi-spot contract (also called job-focused) is a balanced economic exchange that is speci fied – the employer offers short-term purely economic inducements in return for highly speci fied outcomes. Mutual investment (also called organization-focused) is a balanced social exchange that arises when both the employee and employer have an open ended and long-term investment in each other. The underinvestment approach occurs when the employer expects broad and open-ended obligations from employees in return for short-term economic inducements without any commitment to a long term relationship. The overinvestment approach is provided when the employer offers long-term investment and open ended rewards in return for highly specified employee outcomes. In their original empirical study of US employees, Tsui et al. (1997) found that a mutual investment employment relationship was most positively associated with employee attitudes and performance. These four approaches are likely to have a differential effect on trust generation.
A key premise of the psychological contract theory is that employee perceptions of their employer’s failure to fulfil its part of the deal damages the exchange relationship and leads to negative adjustments in employee emotions, attitudes and behaviours, including anger, withdrawal of trust and commitment; and reduced performance and organizational citizenship behaviour. Overall, a wealth of empirical evidence supports this assertion, including two meta-analyses (Bal, De Lange, Jansen & Van der Velde, 2008; Zhao, Wayne, Glibkowski & Bravo, 2007). In terms of Ballinger and Rockmann’s (2010) notion of anchoring events in social exchange relationships, contract breach can be conceptualized as a negative anchoring event that is likely to have multiple effects and potentially trigger a negative spin in the exchange relationship. Looking specifically at the implications of psychological contract breach for trust, a number of studies have shown that breach perceptions are associated with decreased levels of trust in the organization (e.g. Clinton & Guest, 2014; Grimmer & Oddy, 2007; Deery, Iverson &Walsh, 2006; Robinson, 1996). Interestingly, in their meta-analysis, Zhao and colleagues (2007) observed a stronger correlation between breach and mistrust (.53) than between breach and violation (.43), although feelings of violation and emotional outrage are often positioned to accompany breach perceptions (Bordia, Restubog & Tang, 2008) and play a role in negative anchoring events (Ballinger & Rockmann, 2010). The negative effects of psychological contract breach on trust appear to be long-lasting, lending support to Ballinger and Rockmann’s (2010) idea that negative anchoring events provide a frame of reference through which future events are interpreted. Empirical evidence suggests that breach in the previous employment generates mistrust that is carried over to the subsequent employer (Pugh, Skarlicki & Passell, 2003; Parzefall, 2012).
Reflecting the risk and vulnerability inherent in a social exchange relationship, researchers have suggested that trust may provide a key mechanism to explaining the negative effects of breach on employee attitudes and behaviours (Robinson, Kraatz & Rousseau, 1994). A number of studies have shown that trust mediates the relationship between breach and number of central employee attitudes and behaviours such as turnover intentions (Clinton & Guest, 2014; Lo & Aryee, 2004), organizational identification (Restubog, Hornsey, Bordia, & Esposo, 2008), and OCB and performance (Robinson, 1996; Restubog et al., 2008). Interestingly, Zagenczyk et al. (2014) observed this mediating role of trust especially in the case of relational breach. By undermining trust in the employer and its intentions, breach thus negatively influences an employee’s willingness to engage in any further reciprocal actions. As Restubog and colleagues (2008) conclude, employees can confidently expect that the employer will reciprocate their contributions only when trust exists.
To date, empirical research focusing explicitly on the role of trust in idiosyncratic deals remains scarce. Literature on i-deals, however, points to at least three possible roles that trust may play in deals, and even to a possible trust paradox inherent in i-deals. First, flexibility and personalized negotiations that i-deals imply may build on trust or facilitate the development of dyadic trust. Second, i-deals may compensate for trust in low-quality exchange relationships or in the case of psychological contract breach. Third, individualized deals and the resulting special treatment may generate mistrust among fellow employees at the workplace. We discuss all these options below.
By individualizing employment conditions according to employee needs, employers provide special contributions that are likely to involve symbolic and socio-emotional elements, such as trust, that employees will reciprocate (Hornung, Rousseau & Glaser, 2009). For example, Ng and Feldman (2012) found that i-deals relating to flexibility fostered trust which in turn positively influenced employee willingness to engage in OCBs. Alluding to Blau’s (1964) notion of social exchange developing slowly and starting with small gestures, some degree of initial trust between the employer and the employee may be needed before they can strike an i-deal (Ng & Feldman, 2012). For example, employees might need to trust in their employer before feeling confident to ask for a personalized arrangement. Similarly, the employer may need some security in the form of trust that the employee will uphold his or her part of the specialized deal.
Existing evidence also indicates that i-deals can compensate for low-quality employment relationships, which typically imply low degrees of trust, or be used to fix problems involving mistrust in the exchange partner (Guerrero, Bentein & Lapalme, 2014; Anand, et al., 2010; Hornung et al., 2009). Hornung and colleagues were the first to observe that supervisors may try to repair relationships that involve unfulfilled expectations with i-deals, especially in the absence of any formal means or resources to address the unbalance. Guerrero and colleagues (2014) in turn show that i-deals can buffer for the negative impact of breach by maintaining the bond between the employees and their organization. In other words, i-deals appear to substitute for trust, as they reduce uncertainty and increase the feeling of control. Further, the specialized treatment may increase employees’ experience of self-value in the organization.
While i-deals seem to have positive implications for trust in the exchange relationship between the employee and employer, co-workers may perceive them in a negative light – hence the trust paradox. Traditionally, consistency in treatment and standardization of benefits have been considered as a means for creating trust at the workplace (Pearce, 2001). Consequently, organizations implementing i-deals need to ensure open and transparent procedures for determining individualized employment conditions and guard their justice climate in order to prevent the development of mistrust. In line with this assertion, Lai and colleagues (2009) found that the acceptance of others’ i-deals is higher when employees can trust in comparable future opportunities for themselves and others. Furthermore, recent research indicates that the effective implementation of clear rules regarding how employees should work and what they should produce can enable trust in the organization directly by signalling predictability and reliability (Weibel, Den Hartog, Gillespie, Searle, Skinner, & Six, 2016). Indirectly, they may facilitate perceptions of fairness and foster the organization’s reputation. Thus, consistent and open procedures to negotiate and implement i-deals can, in the best case, have positive consequences not only for the individuals involved but also for the employer brand of the organization on the whole.
Because perceived organizational support incorporates the belief that the organization is concerned with one’s well-being and values one’s contributions, it appears to contribute to conditions favourable for the development and maintenance of trust in the employee-organization relationship. Empirical evidence supports this assertion. For example, Dirks and Ferrin (2002) have shown that POS positively impacts trust in leaders of the organizations, positioning POS as antecedent to trust. Similar conclusions were recently drawn by Kurtessis and colleagues (2017) who in their meta-analysis found that high POS was positively associated with trust in the organization. Other studies have in turn looked at POS as a moderating, contextual variable that enhances the effects of trust. For example, Neves and Eisenberger (2014) show that employees with high POS are more likely to trust their organization to under stand the uncertainties in the context in which risk-taking is needed, and especially when the likelihood of failure is high. In other words, employees are more prone to take risks and trust their organization to accept potential failures when POS is high. In similar vein, the emergent research on trust repair has pointed to the potential of POS to act as a remedy to breaches of trust (Webber, Bishop & O’Neill 2012). Consistent with this line of research, researchers have also shown that employees in supportive relationships allow for flexibility in the delivery of their employer’s contributions and are more inclined to trust in their employer to eventually fulfil their part of the employment relationship, for example in the case of psychological contract breach (Dulac et al., 2008). As Tekleab, Takeuchi and Taylor (2005, p. 154) conclude, ‘POS is a foundational belief structure about the overall quality of employees’ exchange relationships with their organizations that, depending on its quality, either protects employees from or makes them more susceptible to intermediate perceptions of violations by the organizations’.
In conclusion, high degrees of POS protect social exchange relationships at the workplace and trust emerges as the lubricant that enhances trust and its positive effects.
The employment relationship (ER) model developed by Tsui and colleagues (1997) captures employer expectations about employee contributions and the inducements offered. Of the four possible ERs, mutual investment relationship appears to induce and create conditions favourable for trust. In their conceptual work, Tsui and Wu (2005) argue that organizations are best served by employing a mutual investment employment relationship, compared to the other types of ERs, positioning trust in an explanatory role. Through the mutual investment approach, employers demonstrate their trustworthiness by initiating the reciprocity process. These initial inducements offered by employers put them in a vulnerable position yet signal trust in their employees and in their continued performance and commitment (Aryee et al., 2002).
Although empirical evidence on the relationship between ER and trust is scarce, it confirms the above-mentioned theoretical assertions. In their study of US managers, Tsui et al. (1997) found that a mutual investment employment relationship relative to the other three ERs was most positively associated with perceived favourable employee attitudes, such as affective commitment and trust in coworkers and performance, including task performance and organizational citizenship behaviour. Zhang, Tsui, Song, Li and Jia (2008) in turn studied how ER and supervisory support influence trust in the organization in a sample of Chinese middle managers. They found a reinforcing effect, so that when supervisor support was high, a mutual investment ER enhanced trust in the organization. However, when supervisor support was low, the ER did not encourage trust. This finding points to the complementary effect of the organization’s and supervisor’s actions for the development of trust.
We discuss the theoretical implications of a social exchange lens for the role of trustworthiness in signalling the development of social exchange, the role of individual exchange-related dispositions, the development of trust and distrust and, finally, trust repair.
To this point, the emphasis has been on the beneficiary taking the risk and demonstrating a willingness to be vulnerable to the actions of the recipient in terms of reciprocating the benefit received – trusting the other party. Is the beneficiary trustworthy? Mayer, Davis and Schoorman (1995) outline a number of characteristics of the trustee that are trust enhancing: (a) ability (b) benevolence – having a positive orientation towards the trustor and (c) integrity – the trustor’s perception that the trustee adheres to a set of principles that are deemed acceptable by the trustor. Social exchange theory specifically focuses on the willingness to be vulnerable (Colquitt & Rodell, 2011) and has little to say about trustworthiness and its role in the development of social exchange relationships. Specifically, the trustworthiness of the beneficiary is downplayed in the theorizing, but extrapolating from empirical evidence supports its importance. Kurtessis et al. (2017) in their meta-analysis found that high POS was positively associated with trust in the organization. While this supports the tenets of trust development in social exchange, it also suggests that an attribution of the motives of the beneficiary is important as POS captures attributions concerning the benevolent or malevolent intent of the organization (Eisenberger, Armeli, Rexwinkel, Lynch & Rhoades, 2001) which in turn heightens the felt obligation to reciprocate. This suggests that benevolence, one characteristic of trustworthiness is important to developing social exchange relationships.
So, how can trustworthiness be demonstrated? The trust literature suggests that organizational, and relational, as well as individual factors, determine the degree to which managers are deemed trustworthy (Whitener, Brodt, Korsgaard & Werner, 1998). On the one hand, the authors suggest that organizations that are decentralized, less formal and hierarchical are more likely to generate trustworthy perceptions; human resource management systems that incorporate procedural justice are more likely to signal trustworthiness and organization cultures that characterize inclusiveness, open communication and place a value on people are more likely to generate trustworthy perceptions. On the hand other, as discussed earlier, well-implemented control mechanisms can also enable trust in the organization (Weibel et al., 2016). This suggests that context is important, and in particular, the organizational context in which managers are engaging in social exchange relationships with their employees. At the same time, it suggests that particular types of organizations will be in a better position to demonstrate trustworthiness in their relationships with employees.
As mentioned earlier in this chapter, social exchange views trust as situationally determined, based on the exchanges between two parties and hence downplays the role of an individual’s disposition to trust. Rotter (1967, p. 651) defined interpersonal trust ‘as an expectancy held by an individual or a group that the word, promise, verbal or written statement of another individual or group can be relied upon’ and trust researchers have used this to capture a propensity to trust (Conlon & Mayer, 1994). McKnight et al. (1998) argue that propensity to trust is likely to have a significant effect in new organizational relationships but not in ongoing relationships as other factors will swamp this effect. Mayer et al. (1995) echo this and argue that the higher the trustor’s propensity to trust, the higher the trust for a trustee prior to information about the trustee becoming available. Putting this together with Ballinger and Rockmann’s (2010) work on anchoring events, this suggests that a positive anchoring event coupled with a higher propensity to trust may accelerate the development of a social exchange relationship particularly when it occurs early in the relationship due to its memorable impact.
Reciprocation wariness is a ‘generalised cautiousness in reciprocating aid stemming from a fear of exploitation in interpersonal relationships’ (Lynch, Eisenberger & Armeli, 1999, p. 468). Wary individuals are fearful that others will use the norm of reciprocity to exploit them and hence adopt self-protective behaviours such as minimal reciprocity (Cotterell, Eisenberger & Speicher, 1992; Lynch et al., 1999). Kamdar, McAllister & Turban (2006) conclude that ‘wary individuals have lower baseline expectations for exchange relationships – including not only what they can expect to receive from others but also what they are obligated to contribute to them – than less wary individuals’ (p. 843). Shore et al. (2009) found that reciprocation wariness moderated the relationship between social exchange and trust in the employer such that the relationship was more positive for low wary individuals than highly wary individuals. Thus, highly wary individuals may see social exchange relationship as entailing greater personal risk due to the fear of exploitation and not adhere to the norm of reciprocity (compared to low wary individuals). Building trust through supportive actions is less likely to be effective with highly wary individuals.
These individual dispositions can hamper the development of trust in exchange relation ships and suggest a number of avenues for future research. How are propensity to trust and reciprocation wariness related? If one is high on reciprocation wariness and fears exploitation, does this translate into a low propensity to trust? Is the common basis for both dispositional tendencies the fear of exploitation? What strategies can be used to counteract or diminish the effects of these dispositional tendencies when the context does not allow for the gradual development of trust?
Social exchange theory and the EOR frameworks reviewed here offer insights into how trust develops and what organizations can do to facilitate this in terms of fulfilling psycho logical contracts (e.g. Robinson, 1996; Restubog et al., 2008; Zagenczyk et al., 2014), granting i-deals (Ng & Feldman, 2012), providing organizational support (Kurtessis et al., 2017) and, a mutual investment ER (Tsui et al. 1997). Less visible in the empirical studies is the role of time in the development of trust. Researchers drawing on social exchange theory assume that the provision of support or the fulfilment of psychological contracts needs to be ongoing and continuous in order to facilitate the development of trust in the EOR. However, an event such as psychological contract breach can undermine trust and, if left unrepaired, can lead to the development of more negative EORs based on distrust. The general thrust of this strand of literature points to the gradual development of trust and the potential for its quick erosion as a consequence of negative events (e.g. psychological contract breach) in that relationship. To this end, psychological contract breach offers an explanation for the erosion of trust in employee-organization exchange relationships.
Until recently, the literature on social exchange has been rather silent on more negative (and presumably distrustful) EORs. Gouldner’s (1960) seminal work on the norm of reciprocity and, in particular, the negative norm of reciprocity, dictates that individuals harm the source of the harm (an eye for an eye etc.). Gibney, Zagenczyk and Masters (2009) introduce perceived organizational obstruction which they define as ‘an employee’s belief that the organization obstructs, hinders or interferes with the accomplishment of his or her goals and is a detriment to his or her well-being’ (p. 667). Although the authors did not capture distrust in their study, one would expect that organizational obstruction would be positively associated with distrust. Shore and Coyle-Shapiro (2012) define perceived organizational cruelty as ‘the employee’s perception that the organization holds him or her in contempt, has no respect for him or her personally, and treats him or her in a manner that is intentionally inhumane’ (p. 141). Continuing in a negative vein, Livne-Ofer and Coyle-Shapiro (2016) define perceived exploitative employee-organization relationships (PERs) as ‘employees’ perceptions that they have been purposefully and repeatedly taken advantage of by the organization, to the benefit of the organization itself, with the anticipation of continued harm in the future’ (p. 3). Research and theorizing on negative EORs is very much in its infancy, and how distrust and negative EORs are related is in need of investigation. One could speculate that distrust is a consequence of these negative EORs, yet at the same time trust (or its erosion) may in part explain how positive (or neutral EORs) shift to negative ones. Trust researchers (Bijlsma et al., 2015; Lewicki et al., 1998; Sitkin, 1995) see trust and distrust as distinct phenomena that co-exist, which raises interesting possibilities in terms of how these map onto positive and negative EORs.
Unfortunately, it is not uncommon for trust to get broken in the employee-organization relation ship. Existing evidence suggests that it may even be the norm for employees to experience a violation of trust by their leaders and organizations (Conway & Briner, 2002). It is therefore not surprising that scholars are becoming increasingly interested in the concept of trust repair, which concerns improving an individual’s trusting beliefs and trusting intentions that have been lowered by a trust violation (Kim, Dirks & Cooper, 2009). The relatively fresh but rapidly growing literature on trust repair has suggested various means to address mistrust in the employer (Gillespie, Dietz & Lockey, 2014; Gillespie & Dietz, 2009; Pfarrer, DeCelles, Smith & Taylor, 2008). Such means include, for example, verbal measures such as apologies, justifications and denials (Tomlinson, Dineen, & Lewicki, 2004); legalistic remedies (Sitkin, 1995); and not doing anything at all (Ferrin, Kim, Cooper & Dirks, 2007). The good news is that that broken trust can be repaired (Mishra, 1996), largely, however, contingent upon the transgressor’s response (Korsgaard, Brodt and Whitener, 2002; Schweitzer, Hershey & Bradley, 2006). At the organizational level, Gillespie and Dietz (2009) developed a model for trust repair after an organization-level failure, defined as an incident, or series of incidents, that threatens the legitimacy of the organization and undermines its perceived trustworthiness. The authors propose that organizational trustworthiness is generated and enacted primarily through leadership and management practices; culture and climate; strategy; as well as systems, policies and processes, and that it is through these four systems that trust can be repaired, too.
Despite these micro- and macro-level approaches to the topic, trust repair explicitly in the context of the EOR frameworks has received relatively little attention. Kim and colleagues (2009) note that psychological contract breach and violation can offer insights into understanding the experience of trust violation. Towards this end, the EOR frameworks that specifically draw on social exchange theory can be useful in extending the present work on trust repair. Similarly, the perspective of trust repair may provide new directions for the social exchange theory-based frameworks to study the employment relationship. We elaborate on these mutually enriching possibilities and consider how they can help further develop how we theorize and research the EOR. Specifically, POS and mutual investment employment relationship and their potential role in the prevention of trust failures and in trust repair deserve further attention. If an organization cares about the wellbeing of its employees and commits to a mutual investment relationship, it is essentially engaging in distrust regulation (Gillespie and Dietz, 2009), i.e. preventing trust violation from occurring in the first place. This may occur, for example, through the norms and standards that underlie appropriate forms of support and contribution in the employee-employer relationship. In other words, a well-functioning social exchange relationship as operationalized by the EOR frameworks can signal trust in the employee-employer relationship. Similarly, they may also facilitate the implementation of i-deals. Employer contributions, for example, in terms of psychological contract obligations, individualized benefits within the framework of an idiosyncratic deal or transparent communication may in turn be framed to demonstrate trustworthiness. In case of breach of trust, they may also act to repair trust, both in terms of regulating distrust and demonstrating trustworthiness. Empirically, Dulac and colleagues (2008), for example, demonstrate that the quality of relationship an individual has, as captured by POS, influences cognitions of breach and moderates how individuals respond to contract breach. In other words, the quality of the relationship influences how an individual interprets an event implying breach of trust and also how he/she responds to that event, thereby presenting POS as a potential remedy for mistrust generated by contract violation – or by a negative anchoring event (Ballinger & Rockmann, 2010).
Finally, literature on trust repair has elaborated on the role of attribution in repair efforts and forgiveness (Kim et al., 2009; Tomlinson et al., 2004; Schweitzer et al., 2006). Similarly, attributional processes influence employee reactions to psychological contract breach (Parzefall & Coyle-Shapiro, 2011). For example, trust repair literature has discussed the role of attribution errors and external versus internal attribution in trust repair (Kim et al., 2009; Tomlinson et al., 2004) whereas the literature on psychological contract breach notes the difference between reneging, i.e. situations in which the organization is either unwilling or incapable of keeping what it has promised, and incongruence, which refers to a misunderstanding (Morrison & Robinson, 1997). Theorizing and empirical work suggests that employees are likely to experience more intense negative emotions when they attribute the initial breach to reneging (Morrison & Robinson, 1997; Robinson & Morrison, 2000). Furthermore, the empirical work of Lester and colleagues (2002) suggests that employees are more likely to attribute breach to the organization’s intentional reneging, while managers tend to blame factors beyond the control of their organization. A closer integration of these literatures could improve our understanding of the mechanisms of both fixing psychological contracts and repairing trust.
The norm of reciprocity acts as a starting mechanism to develop trust and as a stabilizing mechanism to maintain or enhance trust – without which social exchange relationships, given their inherent risk and uncertainty would not develop. Empirical evidence from the EOR suggests that fulfilling promises, granting i-deals, developing supportive and balanced relationships with employees facilitates the development of trust by demonstrating employer trustworthiness. That said, negative events can occur and whether these events undermine trust (and create distrust) depends upon the severity of the event and also the buffering effect of the social exchange relationship in which it occurred. Recently, the EOR has begun to take into account more negative forms of the employee-organization relationship and this is likely to spotlight the role of distrust in shifting EORs from positive (or neutral) to negative.
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