High-involvement Work Practices, Procedural Justice and Trust in the Employer. An Examination in Hochiminh City

In which, the most impacted one is Procedural Justice and High-Involvement Work Practices and the less impacted one is Perceived Organizational Trustworthiness, but not playing as a medi

NGUYEN VU QUYNH HOA

High-involvement Work Practices, Procedural Justice

and Trust in the Employer

An Examination in Hochiminh City

THESIS OF MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City - 2012

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY

-

NGUYEN VU QUYNH HOA

High-involvement Work Practices, Procedural Justice

and Trust in the Employer

An Examination in Hochiminh City

Major: Business Administration Code: 60340102

THESIS OF MASTER OF BUSINESS ADMINISTRATION

Supervisor: PhD Pham Quoc Hung

Ho Chi Minh City – 2012

Hochiminh City, October, 2012

Author of the thesis

NGUYEN VU QUYNH HOA

GRATEFULNESS

The first and in-depth thank I would like to send to my parents and family, who have been supporting and helping me so much so that I can pursue the MBA course as well as finish this thesis

I would like to sincerely thank all teachers at Hochiminh City University of Economics, having taught and given me valuable knowledge as a foundation for doing this thesis

I especially show my deep gratitude to Dr Pham Quoc Hung for his devoted guidance so that I can complete the thesis

I also gratefully thank you all my friends, colleagues and those who helped me answering the questionnaire as a data source for analyzing and giving out the research result of this thesis

Last but not least, the most gratefulness is especially entitled to send to my husband and kids, who have been not only going, but also sharing with me difficulties and hardness during the time I enter the MBA course More than that, it was they who are the “driving force” so that I can accomplish the thesis, reaching such a final result

ABSTRACT

The research uses the quantitative method to define the role of high-involvement work practices and procedural justice on trust in the employer in Hochiminh City The data in this research has been collected from the questionnaire sent to office staffs and managers in Hochiminh City From literature review about trust in the employer, the measurement scale

of employee trust has been built with the 7-point scale Likert The reliability of measurement scale was tested by the Cronbach’s alpha coefficient and correlation coefficient The confirmatory factor analysis has also been built to define whether the data

in the model fits with Vietnamese situation, especially in Hochiminh City The linear regression model was initially built with the dependent variable “Trust in the Employer” and three independent ones “High-Involvement Work Practices”, “Procedural Justice”,

“Perceived Organizational Trustworthiness” After testing the reliability of measurement scale as well as defining the suitability of the model, the model was adjusted to three independent variables as mentioned above but a certain items of them were deleted The result of regression analysis has shown that these three variables have impacted employee trust of organizations in Hochiminh City In which, the most impacted one is Procedural Justice and High-Involvement Work Practices and the less impacted one is Perceived Organizational Trustworthiness, but not playing as a mediating variables as hypothesized

in the research model

TABLE OF CONTENTS

Commitment

Gratefulness

Abstract

List of symbols, abbreviations

List of tables

List of diagrams

CHAPTER 1: INTRODUCTION

1.1 Reasons for this research 1

1.2 Objectives of the research 2

1.3 Subjective and Scope of the research 2

1.4 Research Methodology 3

1.5 Practical meaning of the research 3

1.6 Thesis Structure 3

CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL 2.1 Introduction 5

2.2 Literature Review on Trust in the Employer 5

2.2.1 Trust in Organizations 6

2.2.2 Antecedents to trust in the employer 8

2.2.2.1 Trust Research 8

2.2.2.2 HR Research 9

2.2.2.3 Organizational justice 12

2.3 Research Model and estimation indices for measuring trust in the employer 14

2.3.1 Research model 14

2.3.2 Estimation indices for measuring trust in the employer 15

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research design 17

3.1.1 Measurement scale 17

3.1.2 Sampling method 20

3.1.2.1 Overall 20

3.1.2.2 Sampling method 20

3.1.2.3 Sampling size 20

3.1.3 Data collection tool – Questionnaire 20

3.1.4 Data collection process 22

3.2 Statistical data analysis techniques 22

3.2.1 Encoding the data 22

3.2.2 Eliminating unsuitable answers 22

3.2.3 Screening the data 22

3.2.4 Correlation between variables 24

3.2.5 Verifying the measurement scale reliability 24

3.2.6 Confirmatory factor analysis 25

3.2.7 Linear regression analysis 26

CHAPTER 4: RESEARCH RESULT 4.1 Eliminating unsuitable answers 29

4.2 Sample charactertistics 29

4.3 Screening the data 30

4.4 Correlation between variables 32

4.5 Analysis of reliability and suitability of the measurement scale 34

4.5.1 Measurement scale of each factor of employee trust 34

4.5.2 Measurement scale of trust in the employer 38

4.6 Confirmatory factor analysis 38

4.7 Linear regression analysis 43

4.7.1 Relation between variables to trust in the employer 43

4.7.2 Checking assumptions in linear regression 46

CHAPTER 5: CONCLUSION AND DISCUSSION 5.1 Conclusion about Trust in the Employer 51

5.2 Discussion about employee trust in the organization 51

5.3 Limitation of this research and proposals for further researchers 53 References

List of appendix

LIST OF SYMBOLS, ABBREVIATIONS

CFA: Confirmatory Factor Analysis

HCM City: Hochiminh City

HIWP: High-Involvement Work Practices

HR: Human Resource

HRM: Human Resource Management

POT: Perceived Organizational Trustworthiness

PJ: Procedural Justice

WTO: World Trade Organization

TE: Trust in the Employer

LIST OF TABLES

Table 2.1 Estimation Indices for measuring Trust in the Employer 16

Table 4.1 Normal distribution of Perceived Organizational Trustworthiness 30

Table 4.2 Normal distribution of High-Involvement Work Practices 31

Table 4.3 Normal Distribution of Procedural Justice 31

Table 4.4 Normal Distribution of Trust in the Employer 32

Table 4.5 Correlation coefficient of Perceived Organizational Trustworthiness 32

Table 4.6 Correlation coefficient of High-Involvement Trustworthiness 33

Table 4.7 Correlation coefficient of Procedural Justice 34

Table 4.8 Reliability Statistics of HIWP 34

Table 4.9 Item-Total Statistics of HIWP 35

Table 4.10 Reliability Statistics of PJ 35

Table 4.11 Item-Total Statistics of PJ 36

Table 4.12 Reliability Statistics of PJ after deleted 36

Table 4.13 Item-Total Statistics of PJ after deleted 36

Table 4.14 Reliability Statistics of POT 37

Table 4.15 Item-Total Statistics of POT 37

Table 4.16 Reliability Statistics of POT after deleted 37

Table 4.17 Item-Total Statistics of POT after deleted 37

Table 4.18 Model Summary of control variables 43

Table 4.19 Coefficients of control variables 43

Table 4.20 Model Summary of HIWP and PJ 44

Table 4.21 Coefficients of HIWP and PJ 44

Table 4.22 Model Summary of POT 45

Table 4.23 Coefficients of POT 45

Table 4.24 Some regression indices of three models 46

Table 4.25 Residuals Statistics 47

Table 4.26 Correlation of variance of unchanged residual 47

Table 4.27 Durbin-Watson coefficient of the regression model 48

Table 4.28 Tolerance and VIF coefficient of the regression model 49

LIST OF DIAGRAMS

Diagram 2.1 The hypothesized research model 15 Diagram 4.1 The CFA model after calculation 53 Diagram 4.2 The CFA model after re-calculation 55

CHAPTER 1: INTRODUCTION

1.1 Reasons for this research:

According to the HR research of DG&A Consulting Company (USA), there are only 37% employees clearly understanding the goal pursued by the company and its reasons; 20% employees understanding how their role and jobs are useful for the organization; about 1/3

of employees desiring contributing to the organization On the contrary, there are 20% employees not enthusiastically participating in; 50% employees without comments or avoiding responsibilities Researches about HR satisfaction in local companies also give out main reasons why managing staffs usually leave the company after 2-3 years’ working After working at the company for a certain time, staffs usually are in the “puzzled” state of mind and lack of orientation because of different non-financial reasons such as not clearly understanding the target which the company is to reach in the future; their role in the company or whether it is suitable with the company target or not; how should they themselves behave and make daily decisions to comfort to the spirit of brand name or Management Board’s requirements in case the company policy is not clearly regulated On the other hand, the organizational and decentralization structure of local companies have limited the initiative in managing and carrying out the job Staffs lacking in stable trust in the employer and future of the company are likely to lead to declining trust in themselves and their current jobs and, indispensably, the state that employees “say goodbye” to the company The existing economic crisis has negatively impacted the spirit and confidence

of staffs, which requires companies to take more concerns in maintain and enhance this source of manpower According to the new management concept, staff is a kind of important customers that the company needs to satisfy first in order to ensure this “local partner” positively contributes to the company, having long attachment and trying their best to serve the customer

For the time being, after Vietnam has joined WTO, local companies desiring to expand their business or associating with foreign ones should not only recruit high skilled employees but also know how to get their trust for avoiding “brain-drain”, which is the vital matter for organizations Therefore, the matter is that organizations should recognize, consider and evaluate the antecedents impacting trust in the employer so that they will have suitable orientation for HR management policy This paper, of which the topic

“High-involvement Work Practices, Procedural Justice and Trust in the Employer

An Examination in Hochiminh City”, could partially clear the above matters, revealing

direct as well as indirect relationships of both HR practices and procedural justice with trust The relationships of both HR practices and procedural justice with trust were partially mediated by perceptions of organizational trustworthiness (in terms of perceived ability and trustworthy intentions of the organization) Justice and HR practices were also found to interact such that justice forms a stronger predictor of trust in organizations, when

HR is less developed The implications of these findings for research and practice are discussed

1.2 Objectives of the research:

This thesis is done to define the roles of two factors: high-involvement work practices and procedural justice affecting trust in the employer of employees in HCM City with following basic objectives:

- Firstly, investigating employee trust, defining factors impacting it and the interactive effects between them

- Secondly, defining the role of organizational trustworthiness and high-involvement work practices in order to examine their impact to trust in the employer

- Secondly, building and testing measurement scales of each factor affecting trust in the employer and that of trust in the employer

- Thirdly, using the CFA to find out suitable factors for the model

- Fourthly, defining the strength of those factors affecting trust in the employer in HCM City

1.3 Subjective and Scope of the Research:

Research Subjective is the trust in organizations and the role of high-involvement practices and procedural justice in trust in the employer By collecting data from surveyed questionnaire, we can define three streams of work: trust research, work on strategic HR management and the procedural justice literature More precisely, we explore whether high-involvement work practices (HIWP) and procedural justice are drivers of perceptions

of organizational trustworthiness and of trust in the employer Furthermore, we also examine to what degree HIWP and procedural justice have unique effects on trust at the

organizational level and to what degree they act as functional equivalents

Scope of the research is limited to middle managers and staffs from several organizations

in HCM City This survey was carried out at the beginning of 2012

1.4 Research Methodology:

The thesis used quantitative research method to investigate and define the trust in the employer The 7-point-scale Likert method was used to measure the value of variables For this is a discovery research, sampling method was non-probability one, with convenient form

The auto-reply questionnaire would be used to collect necessary data for the mentioned quantitative analysis The questionnaire would be sent by email with the link to the one designed in the internet The official one could be found out in the Appendix of the thesis

above-The thesis used statistic to infer, analyze the collected results from the sample Cronbach’s alpha was used to choose and consolidate components of the measurement scale CFA was used to test whether the data fit the hypothesized measurement model Finally, linear regression analysis was used to define whether factors really affect trust in organizations as well as the coefficient of these factors in the linear regression equation

1.5 Practical meaning of the research:

The research has some following meanings:

- Firstly, the research result will give readers an overview of the role and impact of involvement practices and procedural justice on trust in the employer

high Secondly, this research helps us recognize measurement scales used for measuring trust

in the organizations and roles of factors affecting trust in the employer in HCM City Base

on this, companies in HCM City will focus on HR management policy to revise or suitably build the Management policy as well as countermeasures for stimulating, encouraging employees so as to get their trust and contribute to the company

-Thirdly, this is a discovery research, which is a foundation for further researches about other aspects of employee trust in organizations in Vietnam

1.6 Thesis Structure:

The thesis consists of 5 chapters Chapter 1 – Introduction will mention reasons for this

research, objective of the research, subjective and scope of the research, research

methodology, real meaning of the research Chapter 2 – Literature Review and Research Model will introduce the Literature Review consisting of some definitions of trust in the

employer, antecedents to trust in the employer and its relations This chapter also introduces the hypothesized research model Chapter 3 – Research Methodology will

mention about building measurement scale, sampling method, data collection method and

process, techniques of statistical data analysis in the research Chapter 4 – Research Results will analyze, explain the collected data as follows: results of testing the reliability

and suitability of the measurement scale and results of interference statistic Finally,

Chapter 5 – Conclusion and Proposals will give out some conclusions for trust in the

employer and some limitations as well as proposals for further researches

CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL

2.1 Introduction:

This chapter will, initially, introduce definitions about trust in organizations as well as antecedents to trust in the employer such as trust research, HR research and organizational justice This chapter also mentions about the interactive effects between HIWP and procedural justice At the end of the chapter, the proposed research model will be built and estimation indices will be given out for measuring the effects of HIWP and procedural justice to trust in the employer

2.2 Literature review on trust in the employer:

In recent years, the concept of trust has gained an important place in management research (Krammer and Tyler, 1996; Rousseau, Sitkin, Burt, and Camerer, 1998) Several decades

of behavioral research have asserted that trust is essential in organizations Without a certain degree of trust, it is almost impossible to establish coordinated action within an organization (Kramer and Tyler, 1996), or across organizational boundaries (Sako, 1992) Trust facilitates relationships between and within organizations, reducing transaction costs and potentially becoming a source of competitive advantage (Chile and McMackin, 1996; Barney and Hansen, 1994) The benefits of trust are widely accepted within the literature, though there is only scarce empirical research about how trust can be built within organizations (Mayer and Davis, 1999)

Trust in the employer is an increasingly important element for organizations to develop and maintain A number of studies have shown employee trust to be a critical variable affecting the effectiveness, efficiency and performance of organizations (Whitney 1994; Kramer and Tyler 1996; Mayer and Davis 1999) Trust has also been identified as highly significant in the fostering of desirable work-related behaviors (Zand 1972; Konovsky and Pugh 1994; Kramer 1999) Employees who have high trust in the organizations they work for stay with the organization longer, put in more effort and work more cooperatively, whereas those who do not trust their organization may reduce the effectiveness of their work (Dirks and Ferrin 2001), produce counterproductive behaviors, such as obstruction or seeking revenge (Bies and Trip 1996) or decide to leave (Robinson 1996) Barney and Hansen (1994) thus conclude that perceptions of organizational trustworthiness and trust in

an organization can provide a competitive advantage for firms

However, although the literature on interpersonal trust is burgeoning, this important concept of trust in the organization as a whole attracted much less attention We ask what makes people trust the organizations they work for Evidence suggests that both dispositional trust and perceptions of organizational trustworthiness may enhance such trust (Kramer 1991), yet empirical work examining these relationships has been limited Schoorman, Mayer and Davis (2007) have built on their seminal ability, benevolence and integrity model of interpersonal trust (see Mayer, Davis and Schoorman 1995) to suggest what drives employees’ trust in their employer Yet, we are not aware of any field studies

of this model We contend that perceptions of organizational trustworthiness are distinct from those focusing at a more interpersonal level, requiring consideration of both the organization’s institutionalized processes and principles and the way representatives of the organization enact these abstract processes and principles (Barber 1983; Giddens 1990)

We suggest that organizational policies in terms of human resource (HR) practices as well

as whether such practices are enacted fairly are important here Although some studies start

to address the influence of HR practices on trust in the employer (Whitener 1997; Williams 2003), the combined impact of bundles of policies and their enacted practices on organizational trust has not been adequately explored

Gould-2.2.1 Trust in organizations:

Researchers in organizational behavior generally conceptualize trust as faith in and loyalty

to the leader (Marlowe and Nyhan, 1997; Mayer, Davies and Schoorman, 1995; Nooteboom and Six, 2003) Trust, therefore, is known to be an important antecedent of risk-taking behavior (Mayer et al.; Hartog, 2003) In organizational behavior literature, trust has been conceptualized as having three elements: (a) trustworthiness, which is the rational trust and entails an assessment of the trustworthiness of the other party based on direct evidence or reputation with an attribution with that party’s competence and his or her intensions to conform to agreements; (b) faith in the leader, which relates to the psychological sources of trust in the leader; and (c) loyalty to the leader, which relates to the identification, affect and routines developed in specific relations (Hartog; Marlowe and Nyhan; Nooteboom and Six)

Trust has been a widely studied concept both by itself but, most importantly, as a component of the quality of relationships In psychology and interpersonal communication, trust has been one of several dimensions identified in relationships It also has been studied

extensively in business management and organizational communication—sometimes as a single concept but, again, most often as a component of relationships In psychology and communication, the emphasis has been on interpersonal relationships among spouses, friends, relatives, and the like In business management and organizational communication, emphasis has been on relationships among managers and between managers and other employees

We define trust as a willingness to be vulnerable to another, based on the belief that the other is reliable, open, competent and concerned (or compassionate) (Mishra and Mishra, 1994; Brockner et al., 2004) According to this concept, trust is understood as the decision

to rely on another party (i.e person, group or firm) under a condition of relational risk with the expectation of at least neutral, if not positive, outcome (Nooteboom, Berger and Nooderhaven 1997; Rousseau, Sitkin, Burt and Camerer 1998) This reliance results in a willingness to be vulnerable (Mayer et al 1995) Relational risk is the potential that the trusting party will experience negative outcomes or will not attain justified and expected positive outcomes if the other party proves untrustworthy (March and Shapira 1987; Sitkin and Pablo 1992) Expectations of the intentions and behavior of the trustee, i.e the perceived trustworthiness of the trustee, are thus pivotal to enable the trustor to take the necessary cognitive “leap of faith” for the decision to trust (Simmel 1908; Lewis and Weigert 1985; Mollering 2006)

Trust in the organization differs from interpersonal trust by its referent as well as its level:

it is not clear what individuals are referring to when they decide to trust their employer Some studies on organizational trust have in fact focused on interpersonal aspects related

to trust in the employer through either immediate working relationships (Cook and Wall 1980; Butler 1991), or relationships between employees and management at various levels

in the organization (e.g Child and Rodrigues 2004) Others, such as Giddens (1990, p.34), relate trust in organizations to “reliability and faith in the correctness of abstract principles”, whereas Carnevale (1995, p.xi) defines it as the “faith that an institution will

be fair, reliable, competent and non-threatening” Thus, organizational trust hinges on the

“collective charactersistics of an administrative organization and top management group which are not reducible to features of individual actors and which ensure some continuity

of activites and direction when those actors change” (Whitley 1987, p 133) However, Giddens (1990) also emphasizes the significance of people in the development of trust in

abstract systems, particularly those who occupy roles representing the interfaces at which trust is built and maintained Therefore, it can be argued that trust in the employer is based

on the assessment, evaluation and aggregation of multiple sources of evidence operating at

a variety of levels relating to the organization (Rousseau et al 1998; Zaheer, McEvily and Perrone 1998)

2.2.2 Antecedents to trust in the employer: trust, strategic HR management and

organizational justice

2.2.2.1 Trust research:

In trust research, two different categories of antecedents to trust in a given entity, including one’s organization can be identified: dispositional trust of the trustor and perceived trustworthiness of the trustee For example, Kramer (1999) in his overview distinguishes several bases of trust which can be roughly categorized into trust based on disposition, on the one hand, and trust based on perceptions of individualized trustworthiness (e.g history-based trust) as well as impersonalized trustworthiness (e.g category-based trust), on the other

First, focusing on dispositional trust, an individual’s propensity to trust is an individual trait reflecting expectations of trustworthiness about others in general (Rotter 1980) It is hypothesized to be an important factor influencing trust in institutions (Johnson and Swap 1982; McKnight, Choudhury and Kacmar 2002) Dispositional trust is thought to drive trusting beliefs, especially in ambiguous situations (Gill, Boies, Finegan and McNally 2005) However, Kee and Knox (1970) argue that trusting beliefs are shaped by dispositional trust even in situations where previous experience is available, such that a disposition to trust creates a filter altering interpretations of others’ actions (Govier 1994)

A recent meta-analysis suggested that propensity to trust may drive and shape the

“cognitive leap” of trust, beyond what previous experience alone would warrant, and identified trust predisposition as having a significant and independent impact on trust even

in the presence of trustworthiness information (Colquitt, Scott and Lepine 2007)

However, in this research, we just focus on the second category, which is also suggested to strongly drive the trust in the employer: the perceived organizational trustworthiness of the employing organization (Barber 1983; Kramer 1999; Schoorman et al 2007) Cognitive definitions of trust build heavily on the concept of trustworthiness, as trust is seen to be

“based on a cognitive process which discriminates among persons and institutions that are trustworthy, distrusted, and unknown’ (Lewis and Weigert 1985)

Perceived organizational trustworthiness is seen as multi-dimensional In the literature on interpersonal trustworthiness, at least two aspects are differentiated: the extent to which trustees are perceived to have trustworthy intensions and ability (Cook and Wall 1980) Trustworthy intensions are often broken down further into benevolence and integrity (Mayer et al 1995; Schoorman et al 2007) Drawing on Schoorman et al (2007), Gillespie and Dietz (2009) elaborate on how these three dimensions of interpersonal trustworthiness (i.e ability, benevolence and integrity) can be applied to the organizational level of analysis They define “organizational ability” as involving the organization’s collective competencies and characteristics that enable it to function effectively to achieve its goals and meet its responsibilities “Organizational benevolence” is understood as an organization’s genuine care and concern for the well-being of its stakeholders Finally,

“organizational integrity” is translated as an organization’s consistent adherence to a set of moral principles and codes of conduct acceptable to stakeholders Here, we define perceived organizational trustworthiness as a global belief about the ability of the organization to achieve its goals (i.e the organization’s ability) and the positive intentions

of the organization (i.e the organization’s benevolence and integrity)

Hypothesis 1: Perceived organizational trustworthiness is positively related to employees’

trust in their employer

2.2.2.2 HR research:

A review of the HR literature suggests that employees’ trust in their organization can be enhanced through the use of certain HR practices (Legge 2005) Trust-inducing HR practices are often referred to as “high-involvement” HR practices (Pleffer and Veiga 1999; Batt 2002) They are designed to improve communication flow, foster empowerment and participation, and encourage employees to invest both tangibly and emotionally, in their employer (Vandenberge, Richardson and Eastman 1999) Such practices are argued to tap into the discretionary effort of workers by fostering psychological links between the organization and the individual employees’ goals, thus shaping their behavior and attitudes (Arthur 1994) and are of greater importance to labor-dependent industries (Pleffer and Veiga 1999)

Evidence suggests that well-designed combinations or systems of HR practices have more impact on performance than individual practices (Macduffie 1995; Delery and Doty 1996) The assumption is that synergistic effects take place, resulting in maximal performance, commitment and motivation Batt (2002, p.587) suggests that such high-involvement work systems generally include “relatively high skill requirements, work designed that enable employees to have both discretion and opportunity to use their skills in collaboration with other workers; and an incentive structure that enhances motivation and commitment” Although there is still a lack of consensus as to which specific HR practices should be bundled together into such a system of high-involvement practices, the following practices are frequently included: (1) information sharing and employee participation, (2) job security, (3) performance management and (4) training (Huselid 1995; Ichniowski, Shaw and Prennushi 1997; Delery 1998; Boselie, Dietz and Boon 2005) Empirical evidence suggests a significant impact if these aligned combinations of HR practices on systems trust, interpersonal trust and organizational performance (Gould-Williams 2003) In addition there is more detailed evidence of the relationship between each of these individual HR practices and trust

Information sharing, or open communication, was found to play a pivotal role in building trust between employees and management (Korsgaard, Brodt and Whitener 2002; Tzafrir, Harel, Baruch and Dolan 2004) Sydow (1998) further proposes that the frequency and openness of communication enhances trust in systems In the line with this, the meta-analysis of Cohen-Carash and Spector (2001) shows that interactional fairness, which includes open communication between managers and employees, positively affects trust in the organization

Job security is also argued to enhance trust in the employer Carnevale and Wechsler (1992) propose a clear link between job security and employees’ willingness to both take risks and the development of trusting attitudes towards an organizations’ agents and, in turn, the organization In other words, job security directly enhances trust as it makes people feel less vulnerable and also has an indirect impact via perceived organizational trustworthiness as offering security can be seen as a strong signal of the organization’s benevolent intentions

Performance management is understood as an integrated process in which managers work with their employees to set expectations, measure and review results, and reward

performance, in order to improve employee performance (Den Hartog, Boselie and Paauwe 2004) Performance management provides a mechanism of communicating to employees what is expected of them and what they can expect in return The transparency generated

by a structured performance management process should enhance employees’ sense of control over their situation and, hence, lead to a reduced sense of vulnerability Mayer and Davis (1999) found that a well-conceived performance management system enhances employees’ trust in senior management They argued that having an accurate performance management system demonstrates that management is skilled in managing the workforce (ability) In addition, they suggest that using systems demonstrating managers want to recognize and reward employees’ contributions signals that management cares about their interests (i.e benevolence)

Training has long been associated with the development of trust (Tannenbaum and Davies 1969) Investment in training and development can be seen by employees as a manifestation of an organization’s benevolence and competence as it is targeted to improve employees’ skills and career opportunities and to increase their employability (Waterman, Waterman and Collard 1994) From an exchange perspective, training can be seen as an investment in the employee which employees may reciprocate by remaining with the firm (Tsui, Pearce, Porter and Tripoli 1997) Investing in training may signal to employees that the organization can be trusted to help their development and thus cares about them and their career For example, in Israeli organizations, Tzafrir (2005) identified that when more training and promotion opportunities existed, trust was higher However, beyond this study, direct empirical support for the impact of training and development on trust in the organization is limited

We suggest that combining these five HR practices impacts trust in the employer in two ways First, HR practices directly influences trust in the employer by helping employees’

to manage their “investment” risks and predict what they need to do to be successful in the organization HIWP clearly delineate what the firm expects from the employee and what the employee is likely to gain in return For example, opportunities for training enable employees to meet their employers’ expectations and are tangible evidence of the organization’s commitment to the employee Open communication and participation provide with a greater sense of control by reducing risk, and family-friendly work practices support the employee by reducing vulnerability related to balancing work and home

commitments (for example, by knowing that they can take time off for family emergencies and make up that time later)

Second, these HR practices are also likely to indirectly affect employees’ trust by enhancing perceived organizational trustworthiness HR practices are “abstract principles” (Giddens 1990) signaling an organizations’ commonly held assumptions, ability and intentions They convey the organizations’ intentions towards its employees and are interpreted as trust-relevant signals by individual employees (Guzzo and Noonan 1994; Rousseau and Greller 1994; Bowen and Ostroff 2004) For example, the choice and composition of HR practices send tangible clues to employees of the extent to which the organization is benevolent and cares about them (Iles, Mabey and Robertson 1990) and also its ability to meet objectives In line with this, we expect that HR systems will affect employees’ perceptions of the trustworthiness of their employer Thus, we suggest:

Hypothesis 2: HIWP are positively related to employees’ trust in the employer

Hypothesis 3: The relationship between HIWP and employees’ trust in the employer is

partially mediated by perceived organizational trustworthiness

2.2.2.3 Organizational justice:

Organizational justice has often been related to trust (for an overview (Cohen-Charash and Spector 2001; Lewicki, Wiethoff and Tomlinson 2005)) Or in other words, procedural justice, according to Greenberg (2005), is one of the forms of organizational justice The justice literature distinguishes at least three different types of justice: distributive, procedural and interactive justice (Colquitt, Conlon, Wesson, Porter and Ng 2001) Distributive justice is concerned with the perceptions of fairness about organizational outcomes (Adams 1963) It may have an antecedent role to play with history-based trust, with past perceptions of justice shaping current perceptions of trust Similarly, procedural justice, which is related to perceptions of fairness related to procedures used to make organizational decisions (Thibaut and Walker 1975), may also inform trust derived from past experiences Interactive justice is based on perceptions of how organizational decisions are communicated and enacted by management (Bies and Moag 1986) Colquitt

et al (2001) suggest a link between perceptions of integrity and justice; however, the quality of the interaction may also be a factor shaping perceptions of benevolence More controversially, perceptions about interpersonal fairness have been argued to be utilized as

a proxy for measuring interpersonal trust (Lind 2001) Although all of these types of

justice have been related to trust, very few studies have examined directly the effect of these different types of justice on trust in the employer (see, however, Saunders and Thornhill 2004)

When looking at trust at the organizational level, procedural justice has been considered to

be of particular importance (Brockner and Siegel 1996) Indeed some suggest that, because procedural justice has been linked so closely with generalized perceptions of consistency and reliability for organizational procedures, it may be the strongest predictor of trust at the organizational level (McFarlin and Sweeny 1992; Stinglhamber, Cremer and Mercken 2006) In contrast, interactional justice is seen to be more closely intertwined with an employee’s specific relationship to her/his supervisor and is thus more clearly related to trust in the supervisor (Cohen-Charash and Spector 2001) The link of distributive justice

to different trust foci, finally, is less clear Conceptually, distributive justice has been linked with attitudes towards specific outcomes such as pay satisfaction (Folger and Konovsky 1989) However, more recent studies show that distributive justice influences both trust in the supervisors and trust in the organization positively (Cohen-Charash and Spector 2011) Procedural justice refers to people’s perceptions of the fairness of the procedures used to determine the outcomes they receive at the work place (Greenberg, 2005) Colquitt (2001) and Greenberg conceptualized procedural justice as having four dimensions: fair formal procedures, fair outcomes, interpersonal justice, and informational justice Fair formal procedures relate to the degree to which people perceive the procedures employed in determining what they receive as fair Fair outcomes refer to the degree to which people perceive that the relevant procedures have been used in determining the outcomes they receive Interpersonal justice pertains to the manner in which people relate with their supervisor in the work place Informational justice relates to the quality of communication between employees and their supervisors in organizations Both theoretically and empirically, evidence has supported that procedural justice plays important roles in the ways subordinates perceive leadership (Folger & Konovsky, 1989; Pillai et al., 1999; Yusof & Shamsuri, 2006)

In this study, we will focus exclusively on the effect of procedural justice on trust in the employer because we are interested in two effects of justice on trust at the organizational level: the risk-reducing effect of justice (its direct relation to trust) as well as signaling effect (its relation to perceptions of organizational trustworthiness) We believe that of all

justice types, procedural justice is most likely to impact trust via both avenues First, procedural justice acts as a risk-reducing mechanism because formal procedural rules protect the individual from the arbitrariness of the system as indicated by Weber (1921) Procedural justice hedges a number of employee-related risks For example, if previous job decisions are perceived to be applied consistently across employees, this suggests that employees adhering to the rules of the game fare better than those who do not Thus, risk is reduced by gathering information from earlier decisions and by enabling employees to predict that behaving well will lead to the expected benefits Also, procedural justice is likely to reduce individual perceptions of risk as it grants employees some control over the distribution of resources (Thibaut and Walker 1975)

Second, procedural justice also signals organizational trustworthiness Justice can be seen

as a signal of the organization’s ability because it reveals something of the transparency and consistency in the resource allocation processes of the organization (Leventhal 1976) For example, Folger, Sheppard and Buttram (1995) argue that procedural justice evokes

“images of accurate, effective, and efficient design processes for maximizing economic productivity at the institutional level” (Forger et al 1995, p.272) Besides ability, procedural justice also signals the intentions of the organizations Tyler and Blader (2001) argue that procedural justice signals an employer’s care and respect for its employees because procedural justice involves a certain amount of equality in their treatment and conveys information about employees’ status as members of a group Thus, procedural justice is likely to affect employees’ perceptions of the organization’s trustworthiness, which, in return, is likely to enhance employee trust in their employer Thus, we hypothesize

Hypothesis 4: Procedural justice is positively related to employees’ trust in the employer Hypothesis 5: The relationship between procedural justice and employees’ trust in the

employer is partially mediated by perceived organizational trustworthiness

2.3 Research Model and estimation indices for measuring trust in the employer: 2.3.1 Research Model:

From related foundations and concepts mentioned as above, the proposed linear regression model can be built with the dependent variable “Trust in the Employer” and independent variables “HIWP”, “Procedural Justice”, “Perceived Organizational Trustworthiness”, in

which “Perceived Organizational Trustworthiness” also plays as mediate variable between HIWP, Procedural Justice and Employee Trust

With mentioned-above hypotheses, we can summarize the research model as follows:

(+)

(-)

(-)

(+) Diagram 2.1 The hypothesized research model

The signals (+/-) in each arrow show the direction (directly/indirectly) of each dependent factor to the independent one (employees’ trust)

These hypothesized relationships will be verified and analyzed in the following survey

2.3.2 Estimation Indices for measuring trust in the employer:

From definitions about trust in the employer and its factors, estimation indices are built as

in the Table below:

High Involvement Work

Practices (HIWP)

Perceived Organizational Trustworthiness

Trust in the Employer

Procedural Justice

- Training and family-friendly work practices

CHAPTER 3: RESEARCH METHODOLOGY

Following two previous chapters, this one will introduce the research methodology with two sections including research design and statistic data analysis technique The research design section will introduce building measurement scale, sampling method, data collection tool and its process The section of statistic data analysis technique will introduce the method of testing reliability of measurement scale by Cronbach’s alpha, confirmatory factor analysis and linear regression analysis

The next step was to choose the tool for collecting data The self-designed questionnaire was used Its contents were presented in the section of data collection tool – questionnaire

of this chapter After building the questionnaire and defining the sample size needed, we would send out the questionnaire for collecting data The collected one would be resulted into statistic one Inferential statistic will be used to show the research result

We will consider in details the choice method of measurement scale, sampling, data collection tool, process and dealing

3.1.1 Measurement scales:

This research is to study about the role of high involvement – work practices and procedural justice to trust in the employers in HCM City, which means studying about people’s attitude to a certain field of life Therefore, using closed questions in attitudinal researches is more convenient Besides, for one of objectives of this research is to investigate employee trust, defining factors impacting it and interactive effects between

them, using closed questions with Likert measurement scale optional answers is more suitable With this kind of answers, we can find the trust in organization of each employee

in each field, each factor at the satisfied or unsatisfied, and high or low level (for 5 and point scale Likert) In the meantime, for Likert measurement scale is the interval one, we can use the collected data for quantitatively treating, analyzing to define the correlation, regression between variables as well as dependent and independent ones

7-However, to ensure the suitability of the measurement scale, Kumar (2005), it is necessary

to deal with 02 following matters:

- Who will decide which measurement scale should be used for measuring the needed?

- How to know a certain tool is suitable for measuring the needed?

The answer for the first question is professional researchers in related fields, which, in this thesis, are the one on trust in the employer as follows:

Trust in the Employer: This is a dependent factor and in order to measure respondents’

overall trust in the organization, we formulated a single item “Overall, to what extend do you trust your organization?” Respondents rated this on a 7-point-scale (ranging from 1 “to

a very low degree” to 7 “to a very high degree”)

Perceived Organizational Trustworthiness: This is an independent factor Drawing on

Mayer and Davis’ (1999) measure of trustworthiness at the interpersonal level, we developed 10 trustworthiness items at the organizational level

a Ability scale: includes 3 following items:

1 This organization is capable of meeting its responsibilities

2 This organization is known to be successful at what it tries to do

3 This organization does things competently

b Benevolence/Integrity scale: includes 7 following items:

1 This organization is concerned about the welfare of its employees

2 Employees’ needs and desires are important to this organization

3 This organization will go out of its way to help its employees

4 This organization would never deliberately take advantage of its employees

5 This organization is guided by sound moral principles and codes of conduct

6 Power is not abused in this organization

7 This organization does not exploit external stakeholders

HIWP: This is an independent factor Nine items were used to measure the set of HIWP

(information sharing and employee participation, job security, performance management, training and family-friendly work practices) such as:

1 Specific goals are established for my job

2 My career progression is dependent on my performance relative to expected goals

3 I am consulted before decisions related to my work situation are reached

4 Employees are able to achieve a work/life balance

5 Adequate training is provided to ensure that employees are competent in their role

6 Appropriate levels of job security are offered to employees

7 There is an effort to locate opportunities for employees to apply their expanding knowledge and abilities

8 Employees are consulted about issues important to them

9 Employees can openly voice their opinions and concerns without fear of retribution

Procedural justice: This is an independent factor Procedural justice was measured with

the five-item procedural justice scale developed by Niehoff and Moorman (1993) as follows:

1 Job decisions are made in an unbiased manner

2 Employees’ concerns are heard before job decisions are made

3 Job decisions are based on accurate and complete information

4 Job decisions are applied consistently across all affected employees

5 Employees can challenge or appeal job decisions made by management

The second question is very important, there are two methods building suitability of a research tool, which is logical argument and statistical proof It is clear that the second one

is more persuasive From related practical researches, Likert measurement scale has been used widely and acknowledged of its conformity

Regarding reliability of the measurement scale, Cronbach’s alpha coefficient will be used

to verify the reliability of variables used in the questionnaire

3.1.2 Sampling method:

3.1.2.1 Overall:

The overall of this research included all of managers, office staffs, group leaders who have been working at different organizations such as limited, joint stock, private, state, joint venture and 100% foreign-owned companies with the age from 18 to 60 years old

3.1.2.2 Sampling method:

In order to reach given research objectives, convenient non-probability research design was used and considered to be suitable for this research The reason for choosing this kind of sampling method was that respondents can easily answer the questions as well as it costs less expense and time-consuming for collecting data

Questionnaires would be directly sent to friends and/or acquaintances and, in the meantime, they were also asked to send these questionnaires to their friends and/or acquaintances until enough

3.1.2.3 Sample size:

The sample size depends on what we want to get from collected data and which relationship we want to build (Kumar, 2005) The more diversified the research problem is, the bigger the sample size is Another common principle is that the bigger the sample size

is, the higher the accuracy of research results are However, in fact, choosing the sample size also depends on an utmost factor, which is financial capability and time that the researchers can get

In the research model, it was defined that there are 06 hypotheses and 25 variables, using the 7-point-scale Likert (from 1: strongly disagree to 7: strongly agree) Therefore, there is

an usual formula for calculating the sample size for MLR (Multiple Linear Regression) as follows: n>=50+8p (Nguyen Dinh Tho, 2011), so the initial calculated samples are: n>=50+8*25 = 250

In this research, due to limitations of finance and time, the sample size would be defined at the necessary minimum level but still meets the demand of the research Therefore, the sample size 200 was acceptable for this research

3.1.3 Data collection tool – Questionnaire:

The self-designed questionnaire was used to collect data in this research The benefits of using the questionnaire for data collection are as follows (Ranjit Kumar, 2005):

- Save cost, time and manpower

- Anonymity is highly ensured for the researcher and respondents are not necessary to meet each other

However, according to Bless (2006), the questionnaire also has some limitations as follows:

- The knowledge of respondents with used terminologies is limited

- The responding rate in the questionnaire is rather low

After considering the demand of collecting data, strengths and weaknesses of this collection tool as well as others used in related researches, the questionnaire was designed and used for collecting needed data Confidentiality was assured and responses were anonymous

Phases of designing the questionnaire:

Step 1: Base on the literature review and previous researches to build the initial

questionnaire

Step 2: All items and instructions were translated from English into Vietnamese

Back-translation into English by native speakers was done to ensure that the translated versions corresponded with the original English version This was the process of translating a document that has already been translated into a foreign language back to the original one – preferably by an independent translator

After back translation, the questionnaire would be re-evaluated by a cognitive testing, which was to investigate how well questions perform when asked of survey respondents, that was, if respondents understood the question correctly and if they could provide accurate answers In evaluating a question’s performance, cognitive testing examined the question-response process (a process that can be conceptualized by four stages: comprehension, retrieval, judgement and response) and considered the degree of difficulty respondents experience as they formulated an accurate response to the question This step was carried out on less than 10 persons who are my acquaintances, relatives and colleagues

to ensure that my questionnaire was correctly understood and answered

After all, the questionnaire was revised and worked out as the final completed one

Step 3: Before officially delivering the questionnaire to the public for interview, we

conducted the pilot study, which was a small experiment designed to test logistics and gather information prior to a larger study, in order to improve the latter’s quality and efficiency A pilot study could reveal deficiencies in the design of a proposed experiment

or procedure and these could then be addressed before time and resources were expended

on large scale studies

We carried out the pilot study on about 50-60 persons working at different organizations in different fields

3.1.4 Data collection process: The software Forms – Google Docs was used to design the

questionnaire in the internet This one was directly or indirectly sent to the surveying

subjects

This questionnaire could be found at the Appendix of this research

After finishing answering the questionnaire in Forms – Google Docs, respondents just need

to click “Send” for saving the data in the internet Whenever the sample size was enough, the questionnaire will be closed and data collection completes

Finally the collected data would be saved and SPSS software would be used for treating and analyzing the data

3.2 Statistical data analysis techniques:

To carry out statistical jobs and analyze collected data, SPSS 16.0 software was used to verify the measurement scale reliability as well as do inferential statistic

3.2.1 Encoding the data:

Respondents’ age and working years were divided into groups for easy handling

In which, the age was divided into 04 groups: 20 – 30 years old (group 1), 31 – 40 years old (group 2), 41 – 50 years old (group 3), 51 – 60 years old (group 4) The working years and working years at the current company were also divided into 04 groups: 01 – 05 years (group 1), 06 – 10 years (group 2), 11 – 15 years (group 3), and over 15 years (group 4) Regarding gender of respondents, it was controlled as follows: 1 = Female, 2 = Male

3.2.2 Eliminating unsuitable answers:

Before handled and analyzed, data was screened and unsuitable answers have been eliminated

3.2.3 Screening the data:

The purpose of data screening/cleaning is to:

(a) check if data have been entered correctly, such as out-of-range values

(b) check for missing values, and deciding how to deal with the missing values (c) check for univariate outliers, check for mulitivariate outliers, and deciding how

to deal with outliers

(d) check for normality, and deciding how to deal with non-normality

Also, in this research, we will examine the normal distribution of variables In probability theory, the normal (or Gaussian) distribution is a continuous probability distribution that has a bell-shaped probability density function, known as the Gaussian function or informally as the bell curve:

(3.1) The normal distribution is considered the most prominent probability distribution in statistics There are several reasons for this: First, the normal distribution arises from the central limit theorem, which states that under mild conditions, the mean of a large number of random variables drawn from the same distribution is distributed approximately normally, irrespective of the form of the original distribution This gives it exceptionally wide application in, for example, sampling Secondly, the normal distribution is very tractable analytically, that is, a large number of results involving this distribution can be derived in explicit form

Skewness is a measure of symmetry, or more precisely, the lack of symmetry A distribution, or data set, is symmetric if it looks the same to the left and right of the center point

Kurtosis is a measure of whether the data are peaked or flat relative to a normal distribution That is, data sets with high kurtosis tend to have a distinct peak near the mean, decline rather rapidly, and have heavy tails

The histogram is an effective graphical technique for showing both the skewness and kurtosis of data set

For univariate data Y1, Y2, , YN, the formula for skewness is:

(3.2)

where is the mean, is the standard deviation, and N is the number of data points The

skewness for a normal distribution is zero, and any symmetric data should have a skewness near zero

For univariate data Y1, Y2, , YN, the formula for kurtosis is:

(3.3)

where is the mean, is the standard deviation, and N is the number of data points

The kurtosis for a standard normal distribution is three

3.2.4 Correlation between variables:

Bobko, P (2001) defined correlation is a statistical technique that shows how strongly two variables are related to each other or the degree of association between the two Correlation

is measured by the correlation coefficient The correlation coefficient should always be in the range of -1 to 1 and is calculated as:

3 Moderate correlation: When the correlation coefficient range is between 0.50 to 0.75, it

is called in moderate degree of correlation

4 Low degree of correlation: When the correlation coefficient range is between 0.25 to 0.50, it is called low degree of correlation

5 Absence of correlation: When the correlation coefficient is between 0.0 to 0.25, it shows that there is no correlation

There are many techniques to calculate the correlation coefficient

For continuous variables in correlation in SPSS, there is an option in the analysis menu, bivariate analysis with Pearson correlation If this correlation of two variables is more than 0.08, we will eliminate the one mostly identical

3.2.5 Verifying the measurement scale reliability:

One of objectives of this research is to build and verify the measurement scales reliability

of each factor of trust in organization as well as that of it The Cronbach’s alpha coefficient will help us carry out this objective

Cronbach’s alpha will check the reliability of measured variables Those which do not ensure the reliability will be deleted from the measurement scale

As presented in the Chapter of Literature Review, three factors taken to do research about trust in the employer were high – involvement work practices, procedural justice, perceived organizational trustworthiness So, it is necessary to verify the reliability of this measurement scale for each factor

In this research, the reliability of measurement scale has been verified by Cronbach’s alpha coefficient to eliminate unsuitable variables According to Hoang Trong and Chu Thi Mong Nguyet (2005), many researchers have agreed that it is good when Cronbach’s alpha

is from 0.8 to nearly 1 and it is acceptable when this coefficient is from 0.7 to nearly 0.8 For this research, only factors, of which the Cronbach’s alpha is more than 0.7, are reliable and remained Besides, the corrected item total correlation was also considered Only factors of which the corrected items total correlation more than 0.4 were remained

The Cronbach’s alpha coefficient is calculated as follows:

(3.5)

In which:

N: number of variables taken for analysis

: Variance of the (i) observed variables

: Variance of the general variable

We will, in turn, verify the Cronbach’s alpha coefficient of each factor’s measurement scale of trust in the employer and that of employee trust in organizations

3.2.6 Confirmatory factor analysis:

After deleting unreliable variables, the remaining variables will be considered about their suitability by analyzing CFA CFA will help us know whether the data fit the hypothesized measurement model

In the technique of statistical analysis, there are two categories of factor analysis depending

on whether the investigator wishes to explore patterns in the data or test explicitly stated hypotheses When carrying out an exploratory factor analysis (EFA), no substantive constraints are imposed on the data Instead it is assumed that each common factor affects every observed variable and that the common factors are either all correlated or

uncorrelated Confirmatory factor analysis, on the other hand, is a theory-driven With CFA it is possible to place substantively meaningful constraints on the factor model The advantage of CFA is that it allows for testing hypotheses about a particular factor structure

In this research, to test whether measured variables are suitable for the model carrying out

in organizations in HCM City, all of them were submitted to confirmatory factor analysis using Amos 16.0 Based on these calculations, we will eliminate incompatible ones for carrying out the next step, linear regression analysis Thus, several fit indices were compared The Chi-square statistic has traditionally been used to evaluate model fit, however several author have identified various problems (e.g Bentler & Bonnett, 1980; Bentler 1990, Bollen 1989, Mulaik, James, Van Alstine, Bennett, Lind & Stilwell, 1989) Therefore, some other fit indices are also evaluated First, some incremental or comparative fit indices are examined The comparative fit index (CFI) as proposed by Bentler (1990) compares the model against a base line model The Tucker-Lewis Fit Index (TLI) or non-normed-fit index (Bentler & Bonnett, 1980) has been found to be very robust and relatively sample size independent (Mulaik et al 1989) Therefore, these three indices were used Values ranging from the high 0.80s and 0.90s have traditionally being seen as indicators of a good fit (Marsh, Balla & McDonald 1988) However, more recently Hu and Bentler (1999) have argued that the fit indices should reach a level of 95 or higher Lack

of fit indices constitutes a second set of fit indices Here, the Root Mean Square Error of Approximation (RMSEA; Browne & Cudeck 1992) is used since it takes degrees of freedom into account and penalizes less parsimonious models A value of less than 0.05 is ideal, values ranging between 0.06 and 0.08 are acceptable and values larger than 0.10 indicate poor fit (Browne & Cudeck 1992) In summary, according to Tho & Trang (2008), the model, of which TLI, CFI values ≥ 0.9, CMIN/df ≤ 2, RMSEA ≤ 0.08, is suitable with data in the market

After calculation, if such above indices are not satisfied, we should delete some items of each variable, which are smaller than 0.4, until they are satisfactory with the measurement indices

3.2.7 Linear regression analysis:

Linear regression analysis was used to define whether factors really affect trust in organizations as well as the coefficient of these factors in the linear regression equation In this regression model, the dependent variable is trust in the employer and the expected

independent ones are high involvement-work practices, procedural justice and perceived organizational trustworthiness, which also plays as a mediate variable

Base on the literature review and results of Pearson correlation coefficient as above, we will take all independent variables in the confirmed regression model by Enter method

mentioned-In order to compare the role of factors to trust in organizations, we took 3 steps, in which the 1st step to test the relation between control variables and TE, 2nd step to test the relation between control variables, HIWP, PJ and TE, 3rd step to test the relation between control variables, POT and TE This allowed testing Hypotheses 1, 2 and 4, proposing main effects for HIWP justice and trustworthiness, respectively

Next, additional analyses were also performed to test the meditational hypotheses that suggested that the relationships of HIWP (hypothesis 3) and justice (hypothesis 5) with trust are mediated by perceived organizational trustworthiness In this test, we took 3 models at the same time:

- Model 1: Dependent variable: Trust in the Employer (TE)

Independent variables: control ones such as gender, age, working years, and working years at the current company

- Model 2: Dependent variable: Trust in the Employer (TE)

Independent variables: all mentioned-above quantitative ones together with HIWP and PJ

- Model 3: Dependent variable: Trust in the Employer (TE)

Independent variables: all above together with POT

All predictor variables were centred on their respective means (Aiken, West and Reno 1991)

Finally, to ensure the reliability of constructed regression equation, a series of defining violations of necessary assumptions in linear regression was also conducted Assumptions tested in this section were:

* Linear correlation (using Scatterplot diagram): This test is to estimate how the straight

suits the observed data If the assumption of linear correlation and equal variance is satisfied, we will not see any correlation between predicted values and residuals, they will distribute accidentally around the 0 ordinate