Why do I (not) trust my employees? Predicting factors for leaders’ trust in employees

Despite the growth of research on interpersonal trust and the establishment of a widely accepted trust determinants model, studies have focused mostly on employees’ trust in leaders. This study innovates by investigating factors that determine leaders’ trust in employees. We focus on cognitive and affective trust and examine how leaders place trust in their employees based on perceived in-role and extra-role performance. Furthermore, we examine how performance leads to inferring trustworthiness traits that affect cognitive and affective trust. Survey data were collected from three Bhutanese organizations comprising 72 leaders who evaluated 302 employees over three different time points with a one-month interval between them. Results from the multi-level modeling revealed distinct predictors of the two trust bases: in-role performance for cognitive trust and extra-role performance for affective trust. These performance indicators are positively associated with trustworthiness traits and trust but have a multifaceted effect. While in-role performance is strongly linked to ability and cognitive trust, and extra-role performance is linked to benevolence and affective trust, both performance dimensions are associated with integrity. Our findings highlight the importance of perceived performance in inferring trustworthiness and subsequently building trust.