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The Use of Rewards to Increase and Decrease Trust: Mediating Processes and Differential Effects

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  • Donald L. Ferrin

    (School of Management, State University of New York at Buffalo, Buffalo, New York 14260)

  • Kurt T. Dirks

    (John M. Olin School of Business, Washington University in St. Louis, St. Louis, Missouri 63130)

Abstract

We test hypotheses asserting that reward structures—an omnipresent element of the work context—have a strong influence on interpersonal trust, and we explore the cognitive and behavioral routes through which the effects may occur. Specifically, we use attribution theory to identify several core processes including social perception (causal schemas), self-perception, and attributional biases (correspondence bias, suspicion effects, and preexisting expectations) that may explain trust development. A 3 (cooperative/competitive/mixed rewards) X 2 (high/low initial trust) experimental design in a problem-solving task was used to examine the hypotheses. The results suggest that reward structures have a strong influence on trust, and that the effect is mediated by causal schemas, suspicion effects, and self-perception. We also found some support for the prediction that the impact of mixed reward structures on trust is biased by individuals' preexisting expectations about their partner's trustworthiness. The theory and results suggest that attribution theory provides a useful framework for understanding the complex, diverse, and multiple routes through which trust may develop.

Suggested Citation

  • Donald L. Ferrin & Kurt T. Dirks, 2003. "The Use of Rewards to Increase and Decrease Trust: Mediating Processes and Differential Effects," Organization Science, INFORMS, vol. 14(1), pages 18-31, February.
    • Handle: RePEc:inm:ororsc:v:14:y:2003:i:1:p:18-31
    DOI: 10.1287/orsc.14.1.18.12809
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