HRM bundles and organizational trust

• Date: 01 January 2018
• Author: Mika Vanhala,Riikka Ahteela
• DOI: http://doi.org/10.1002/kpm.1561
• Published date: 01 January 2018

RESEARCH ARTICLE

HRM bundles and organizational trust

Riikka Ahteela

1

|Mika Vanhala

2

1

Turku, Finland

2

School of Business and Management,

Lappeenranta University of Technology,

Lappeenranta, Finland

Correspondence

Mika Vanhala, School of Business and

Management, Lappeenranta University of

Technology, Lappeenranta, Finland.

Email: mika.vanhala@lut.fi

According to the resource‐based view of the firm, a firm can be competitive only if its resources

are unique and valuable. Therefore, the good functioning of the internal organization, including

good human resource management (HRM) and high levels of trust, is considered to be a strategic

issue and a critical source of competitiveness. It is also said that one of the growing challenges for

HRM is to build a positive cycle of trust in the organization. This study aims to show the effects of

HRM bundles, also known as HRM clusters, on various dimensions of organizational trust (inter-

personal and impersonal). Confirmatory factor analysis, cluster analysis, and analysis of variance

are used to analyze data from 14 organizational units in the information and communication

technology and forest industries in Finland. The major finding is that among all the dimensions

of organizational trust, only trust in other employees' competence and benevolence differs

among the three HRM clusters.

1|INTRODUCTION

As Barney and Wright (1998) argue, most corporate annual reports

boldly state that the firm's people are its most important assets.

However, when organizations require cost‐cutting, they look first to

reduce investments in people, such as training, wages, and headcounts

(Barney & Wright, 1998). The inevitable outcome of such downsizings

and cost‐cuttings is mistrust and a trust gap between managers and

employees (Tyler, 2003; Rankin, 1998).

According to Barney & Wright, (1998), the HR function and

human resource management (HRM) processes have an important

role in providing conditions in which the firm's people can best pro-

vide sustainable competitive advantage for the company. Trust

increases the efficiency and effectiveness of communication

(Blomqvist, 2002) and of organizational collaboration (Mayer, Davis,

& Schoorman, 1995; Tyler, 2003). It has also been identified as a

critical factor in leadership (Tyler, 2003), job satisfaction (Shockley‐

Zalabak et al., 2000), commitment (Dirks & Ferrin, 2001), and perfor-

mance (Barney & Hansen, 1994).

According to research on intraorganizational trust (see, e.g., Whit-

ener, 1997; Kramer, 1999; Möllering, Bachmann, & Lee, 2004; Bijlsma

& Koopman, 2003; Tyler, 2003), trust can be seen to play a role in

almost every area of human resources: training and development, com-

pensation, promotion, job duties, job security and placement,

performance evaluation, feedback, and among others. Whitener et al.

(1998) proposed that organizations can enhance trustworthiness by

creating structures and processes that make trusting successful.

Recent research on trust and HRM reveals that fairness of the

organization's performance appraisal system (McCauley & Kuhnert,

1992), procedural justice (Mayer & Davis, 1999), training and develop-

ment (Whitener, 1997), transformational leadership (Gillespie & Mann,

2004), clarity of tasks and roles (Tidd et al., 2004), job rotation (Zeffane

& Connell, 2003), and participative decision‐making (Gilbert & Tang,

1998; Mishra & Morrissey, 1990) is all positively related to organiza-

tional trust. However, according to Tzafrir, Harel, Baruch, and Dolan

(2004), some trust research has tried to take HRM practices into

account (e.g., Morrison, 1996; Whitener et al., 1998) but has failed to

develop a comprehensive model of the consequences of HRM

practices for trust. In addition, despite the claims that HRM practices

play a crucial role in creating high trust in organizations, trust is rarely

considered in traditional HRM models or studies, but instead, the

relationship between the HRM constellation of factors and the outputs

of the firm is taken for granted (Searle et al., 2007). This study contrib-

utes to this field of research by examining trust at several different

levels and considering bundles of different kinds of HRM practices.

The basic underlying notion of this paper is that HRM practices

can have an important impact by instilling trust and confidence in

the organization (Tzafrir et al., 2004). It is intended to show this

impact empirically by studying the effects of various types of combina-

tions (i.e., bundles)of HRM practices on both interpersonal (competence‐,

benevolence‐,and reliability‐based)and impersonal trust. Previously,

trust has been studied as a mediator in the relationship between

HRM practices and innovativeness and performance (Ahteela,

Blomqvist, Puumalainen, & Jantunen, 2010). The results of those

studies were limited, and in this study, an attempt is made to study

trust at a more detailed level.

Received: 22 February 2017 Accepted: 19 December 2017

DOI: 10.1002/kpm.1561

Knowl Process Manag. 2018;25:3–11. Copyright © 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/kpm 3