A multi-angled, research-based and practice-oriented look into aspects that build, erode or influence workplace trust.
In today’s complex workplaces, building trust isn’t just a “nice to have.” It’s a strategic necessity. Research consistently shows that when trust thrives, so do collaboration, communication, decision-making, motivation, innovation, engagement, commitment, performance and employee satisfaction. Trustworthy leaders inspire loyalty and confidence. They create psychological safety that allows people to take smart risks, speak up with new ideas and embrace change.
On the other hand, missteps by a single or a few leaders may erode trust in entire institutions, as demonstrated by the Cummings Effect in the UK during the COVID-19 outbreak. Trust is deeply context-dependent, shaped by experience, culture and communication, rather than “one-size-fits-all.” Overlooking trust influencers and nuances risks not only low trust levels, but also misalignment between employees, leaders, vendors and customers, leading to friction, frustration and additional adverse consequences.
Communication
Frontline employees’ trust in leadership is closely tied to how they perceive organizational communication. Research shows that Transparent and inclusive communication affects trust, and through it (and other factors) performance and satisfaction. Similarly, when managers actively listen and engage with employees through internal digital platforms, demonstrate they understand and address employee concerns promptly, trust improves. Consistent, transparent and empathetic messaging builds trust, which helps leaders earn buy-in and supports their sense-giving efforts.
Frequent meetings, and especially direct face-to-face interactions, also encourage the formation of trust. In turn, this enhances performance, commitment, satisfaction, creativity and “citizenship behavior,” while reducing turnover intentions. Trust is formed and maintained when people feel heard and when communication is personal, not just performative.
Other leadership behaviors that foster trust
As substantiated by studies, employees trust leaders who inspire, motivate, encourage optimism and flexibility, and foster open communication and relationships with employees, ensuring they feel valued and included. This translates into team effectiveness.
Additionally, promoting employee participation in decision-making, empowering, showing support and respecting psychological contracts further help build employees’ trust in the organization. But this isn’t just about leaders being trustworthy; it’s also about them trusting and showing trust in their teams: Trusted employees receive more resources and opportunities, which promotes their improved performance, and employees’ felt trust increases their sense of responsibility, empowerment and organization-based self-esteem, which improves performance. Furthermore, mutual trust improves performance and reduces turnover.
Trust can even be contagious and be transferred through third-party endorsements. For example, when an employee trusts their manager, and they learn that their manager trusts another employee, the first employee’s trust can be extended to the second employee, via the trusted manager.
The double-edged sword of felt trust
A study indicated that “overly” trusting employees can have adverse consequences: Felt trust can lead to emotional exhaustion, especially if expectations are unclear or support, such as in resources, is lacking. Leaders can mitigate this by providing feedback, mentoring, recognition and resources.
Power dynamics and ethnic, cultural and generational diversity
Many tech hubs, such as Silicon Valley and New York City, are highly ethnically diverse. Furthermore, approximately 40% of the US’s software engineers are foreign migrants, mostly from countries with much higher power distance norms than the US or some other Western countries. That matters.
Research suggests that high power distance (when employees feel a large gap between themselves and leaders) can suppress trust. Reducing power distance through collaboration and communication has been shown to improve trust. Additionally, when organizations communicate constraints fairly and transparently, the effect of high power distance on trust weakens. Bypassing the traditional hierarchy may have a different impact on trust when individuals from different cultural norms are involved. Particularly, employees’ communication with senior leaders, bypassing their direct supervisors without their alignment, can lead to mistrust, more so with people of specific cultures or generations than with others.
Power distance and hierarchical norms and values significantly differ not only between world cultures (and people who migrate from them), but also between generations. Power dynamics cut both ways: High-power individuals often trust less because they feel self-reliant or wary of opportunism, while lower-power individuals tend to trust more, hoping for benevolence.
World cultures also differ in the “default” trust levels that individuals have in others with whom they are not closely acquainted. Furthermore, other cultural aspects, which significantly differ among world cultures, can also affect trust, such as leaders’ “self-protectiveness.”
Regardless of background culture, ethnic diversity plays a role in trust-formation: People who live in highly ethnically diverse neighborhoods tend to have lower baseline trust levels. Furthermore, forming emotional connections or trust between ethnically different individuals at work may be more complicated than between ethnically similar employees, but close, personal contact can help mitigate that, as research showed.
You can read more about some of the cultural and generational contexts discussed here, as well as about the importance of other individual and societal contexts, in my previous article, “Bridging contextual gaps: How culture and perception shape team success.”
Ethical leadership, emotional intelligence and organizational identity
Various studies have shown that trust grows when employees perceive their leaders as being ethical, fair and emotionally intelligent. Treating people with dignity, promoting inclusion and offering development opportunities all strengthen trust.
Trust works best when it aligns with employees’ expectations: Employees who receive more or less trust than they desire perceive it as unfair, leading to disengagement or stress.
Healthy lack of trust
Trust skepticism can also be healthy in moderation, driving accountability and innovation. Encouraging open dialogue, even when it challenges authority, can create more resilient organizations.
Ultimately, trust is not just about feeling good. It is about doing better business.
This article is published as part of the Foundry Expert Contributor Network.
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