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Trust Works! Sources and Effects of Social Capital in the Workplace

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Abstract

Substantial evidence illustrates that the social capital of a society affects the productivity of its firms and thereby lifts economic growth rates. The precise transmission mechanisms from social attitudes to organizational efficiency are still a black box. This paper investigates whether and in what form the social and institutional trust of employees has an impact on networks and trust within a firm (termed workplace social capital). A two-level approach enables a simultaneous analysis of potential individual-level and firm-level driving forces of workplace social capital surveyed from 1244 employees of 116 firms. Individual endowments of social and institutional trust are strongly associated with increased rates of workplace social capital at the employee level. High-trust individuals also appear to be clustered in firms, which is evidence for a sorting effect and the potential impact of a firm’s embeddedness in the local area. Aggregated firm rates of workplace social capital are influenced by some of the management tools analysed such as focus on worker’s health and work–life balance. In addition, we find that workplace social capital has a sizable and beneficial impact on satisfaction with obtained wage indicated by employees which is assumed to be a fundamental precondition for high work effort. Thus, we observe a link going from individual trust to wage satisfaction that is mediated by workplace social capital and represents a potential causal mechanism for inducing higher workforce productivity.

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Notes

  1. As opposed to the alternative “You can't be too careful when dealing with people”.

  2. For a detailed exposition on the main findings derived from research on social trust in economic analysis one can consult either Nannestad (2008) or Chapter 7 of Beugelsdijk and Maseland (2011).

  3. The two questions are most prominently used in the European Values Study (EVS) and the European Social Survey (ESS). We adopt the exact wording of the questions along with the codification employed in the ESS.

  4. For an analysis of the statistical properties of instruments used in the Good Work survey, see Schütte (2011).

  5. The measures were selected based on a list frequently implemented in German firms and devised by the consultancy IO Business URL: http://io-business.de/wp-content/uploads/2010/10/10_10_05_Mitarbeiterbindung_Abfrage_des_Bedarfs.pdf.

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Authors and Affiliations

  1. Department of Economics, University of Innsbruck, Universitaetsstr. 15, 6020, Innsbruck, Austria

    Christoph Hauser, Sibylle Puntscher & Gottfried Tappeiner

  2. Institute for Economic Research, Chamber of Commerce Bolzano/Bozen, Via Alto Adige 60, 39100, Bolzano, Italy

    Urban Perkmann

  3. Department of Statistics, University of Innsbruck, Universitaetsstr. 15, 6020, Innsbruck, Austria

    Janette Walde

Authors
  1. Christoph Hauser
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  2. Urban Perkmann
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  3. Sibylle Puntscher
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  4. Janette Walde
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  5. Gottfried Tappeiner
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Corresponding author

Correspondence to Christoph Hauser.

Appendix

Appendix

See Table 9.

Table 9 Descriptive Statistics and Correlation Coefficients for Individual Social Capital (ISC) and Social Capital in the Workplace (WSC)
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Hauser, C., Perkmann, U., Puntscher, S. et al. Trust Works! Sources and Effects of Social Capital in the Workplace. Soc Indic Res 128, 589–608 (2016). https://doi.org/10.1007/s11205-015-1045-z

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