CHAPTER II

RELATED STUDIES

FOREIGN

According to the study of VM Sibamba, Trust in leadership is

immensely important, because it encourages employees to have the
confidence that their supervisors will assist them in resolving work-related
challenges, ultimately stimulating employees‟ job satisfaction and work
engagement (Chughtai, Byrne, & Flood, 2015; Li & Tan, 2013). According to
Brown, Gray, McHardy, and Taylor (2015), and Blommaert, Van Den Broek, and
De Pooter (2014), high levels of employee trust in the supervisor result in
positive organisational performance, because employees are more likely to
increase their performance when they are treated with honesty and fairness;
whereas low trust in the supervisor is more likely to generate a dissatisfied and
disengaged workforce. In a study conducted by McCabe and Sambrook (2014)
in the health care sector, it was found that challenges such as retrenchment
and downsizing caused reduced levels of trust among employees, which often
resulted in poor organisational performance and high turnover. Therefore, the
development of trust is considered to be crucial for positive employee
behaviour at work.

Employees who are engaged in their work have a willingness to

contribute more to their organisation, and are motivated to invest a lot of their
time executing their responsibilities (Demerouti, Bakker, & Gevers, 2015).
According to Malinowski and Lim (2015) and Abu-shamaa, AlRabayah, and
Khasawneh (2015), an organisation with engaged employees has a better
chance of achieving its strategic objectives and increasing its revenue; with
work engagement also leading to higher employee job satisfaction. Hsieh and
Wang (2015) found that trust improves the work engagement of employees,
which also results in satisfied employees who are involved in their work on a
daily basis.

Trust is exhibited in a number of ways within an organisation: there

is trust in the organisation, trust in the immediate supervisor, and trust in the
co-worker (Burke, Sims, Lazzara, & Salas, 2007). Prior research studies have
shown that having an atmosphere of trust in the organisation can benefit co
-workers, the immediate supervisor, and the organisation (Brown et al., 2015;
Hsieh & Wang, 2015; Li & Tan, 2013). Some of these benefits include the
display of positive workplace behaviours and attitudes at work, improved
collaboration and processes, and above-average levels of performance
(Chughtai & Buckley, 2008).

According to the Social Exchange Theory (Blau, 1964 ), interactions

are interdependent: The actions of one party in the social relationship are
subject to the actions of the other party (Wikhamn & Hall, 2012). Within the
paradigm of this theory, trust in the employment relationship can be regarded
as a reciprocal activity that requires any person to first demonstrate trust and
then receive trust in return. Reciprocity in the trust relationship refers to
positive expectations of people, and positive expectations of the organisation
regarding competence, reliability, and goodwill (Mayer, Davis, & Schoorman,
1995). Smyth, Gustafsson, and Ganskau (2010) therefore defined trust as “a
disposition and attitude concerning the willingness to rely upon the actions
ofor be vulnerable towards another party, under circumstances of contractual
and social obligations, with the potential for collaboration” (p. 119).Employees
prefer to work in organisations where they trust and feel trusted by the
organisation, because trust creates added value, improves the flow of
information, and enhances relationships, interaction, and cooperation (Krot &
Lewicka, 2012; McShane & Von Glinow, 2009).

According to Rego, Reis Júnior, and Pina e Cunha (2015), employees

tend to trust organisations and leaders when they act with honesty, integrity,
and compassion. Lacking a sufficient level of trust in the employer may even
result in the employee resigning from the employment relationship, resulting
in a potential skills shortage in the organisation (McShane & Von Glinow,
2009). Krot and Lewicka (2012) further asserted that trust has the ability to
improve business processes, because it encourages higher levels of
cooperation

Huang (2012) defines trust in the immediate supervisor as an

interpersonal relationship between the employee and his or her immediate
supervisor that stems from daily interactions between the two parties. This
type of trust originates from an assessment of the character and behaviour of
the employee and the immediate supervisor (Chughtai & Buckley, 2008). Trust
in the immediate supervisor is a significant predictor of improved employee
performance and positive organisational outcomes (Huang, 2012). Employees
are able to perform their work with a lot of determination and dedication if
they firmly believe that their immediate supervisor is trustworthy, and
provides them with the necessary support whenever they are confronted by
challenges (Chughtai & Buckley, 2008).