THE EFFECTS OF ORGANIZATIONAL STRUCTURE ON

EMPLOYEE TRUST AND JOB SATISFACTION

by

Kelli J. Dammen

A Research Paper

Submitted in Partial Fulfillment of the Requirement for the

Master of Science Degree in Training and Development

Approved for Completion of 4 Semester Credits TRHRD-735 Field Problem in Training and Development

Joseph A. Benkowski, Research Advisor

The Graduate School University of Wisconsin-Stout

May 2001

The Graduate College

University of Wisconsin-Stout

Menomonie, WI 54751

ABSTRACT

Dammen Kelli J (Writer) (Last Name) (First) (Initial) The Effects of Organizational Structure on Employee Trust and Job Satisfaction (Title) Training and Development Joseph A. Benkowski 5/2001 61 (Graduate Major) (Research Advisor) (Month/Year) (No. of Pages)

American Psychological Association (A.P.A) Style (Name of Style Manual Used in this Study)

Keywords: organizational trust, job satisfaction, high performance organization, and traditional organization.

Employees in all organizations want to work in an environment of trust and

respect where they feel they are making a real contribution to organizational goals and

objectives. They want to be able to have the opportunity to show management that they

can accomplish a task with the creativity obtained from working in teams.

There is a consensus in the literature reviewed that trust and job satisfaction are

essential elements to an organizations success. Cook and Wall (1980) conclude that trust

between individuals and groups within organizations is a highly important ingredient in

the long-term stability of the organization and the well-being of its members (39). By

examining the relationship between trust in management and employee job satisfaction,

corporations will have the knowledge necessary to assess their current culture and, if

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needed, develop a culture that allows for growth of its employees through high levels of

trust.

The purpose of this study was to research the possible relationship that exists

between the individuals level of organizational trust and the individuals job satisfaction.

Also examined was the influence the organizational culture (high performance vs.

traditional hierarchical organization) had on the individuals level of trust and job

satisfaction.

To examine this relationship, three hypotheses were tested using a survey that

examined organizational trust and job satisfaction. Organizational trust was measured by

four dimensions (openness/honesty, reliability, concern for employees and identification).

Four organizations agreed to participate in the study. Each organization was sent 25

surveys to distribute to personnel. Two of the organizations were, by definition,

traditional hierarchical organizations and the other two were high performance

organizations. Out of the 100 surveys distributed, 84 completed and valid surveys were

returned. Therefore, the overall response rate was 84 percent.

The findings of this study indicate that a relationship does exist between an

individuals level of organizational trust and his/her overall job satisfaction. The study

also indicated that a significant relationship exists between the structures of the

organization and overall levels of both trust and job satisfaction.

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TABLE OF CONTENTS

Page

LIST OF TABLES.. viii

LIST OF FIGURES ix

ACKNOWLEDGEMENTS x

CHAPTER ONE: INTRODUCTION

Background...

Purpose of Study...

Research Objectives..

Significance of Study

Limitations

Assumptions.

Methodology Overview

Summary of Research Paper

Key Terms

1

2

3

3

3

4

4

4

5

CHAPTER TWO: REVIEW OF LITERATURE

Introduction...

Organizational Trust.

According to Theorists..

According to Management Consultants

Dimensions of Organizational Trust.

Job Satisfaction.

Components of Job Satisfaction...

Comparison of Low Trust Organizations to High Trust Organizations.

High Performance Organizations vs. Traditional Hierarchical Organizations..

Summary

6

6

7

8

9

10

11

12

17

19

CHAPTER THREE: RESEARCH METHODOLOGY

Research Design

20

iv

Research Model.

Hypotheses

Hypothesis 1...

Hypothesis 2...

Hypothesis 3...

Instrumentation.

Data Analysis

Summary...

21

22

22

23

23

23

24

25

CHAPTER FOUR: RESULTS

Overview...

Response Rate..

Respondents Profile

Organizational Trust Dimension Relationships

Hypothesis Testing

Hypothesis 1

Hypothesis 2

Hypothesis 3

26

27

27

30

31

31

36

40

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Introduction...

Purpose of Study...

Summary of Procedures

Sample Populations

Instrumentation..

Data Collection..

Survey Response Rate

Hypotheses.

Hypothesis 1...

Hypothesis 2...

Hypothesis 3

Conclusions...

Recommendations for Traditional Hierarchical Organizations.

41

41

41

41

42

42

43

44

44

45

45

46

47

v

Recommendations for High Performance Organizations..

Recommendations for Future Research.

47

48

REFERENCES 49

APPENDIX A: First Letter to Organization Presidents.. 52

APPENDIX B: Second Letter to Participating Organization Presidents. 54

APPENDIX C: Cover Letter... 56

APPENDIX D: Organizational Trust and Job Satisfaction Survey. 58

vi

LIST OF TABLES

Page

Table 1. Response rates... 27

Table 2. Respondents Profile. 28

Table 3. Percentages of years with organization. 29

Table 4. Percentages of organizations industry. 30

Table 5. Percentages of organizations size 30

Table 6. Openness/honesty dimension 32

Table 7. Reliability dimension 33

Table 8. Concern for employees dimension 34

Table 9. Identification dimension... 35

Table 10. Relationship between organizational trust and organizational structure 36

Table 11. Components of job satisfaction... 37

Table 12. Relationship between job satisfaction and organizational structure... 39

Table 13. Relationship between overall organizational trust and job satisfaction.. 40

vii

LIST OF FIGURES

Page

Figure 2.1: Factors influencing employee satisfaction and dissatisfaction. 11

Figure 2.2: Values associated with maintaining (or building) trust 16

Figure 3.1: Organizational trust, job satisfaction and culture. 21

Figure 4.1: Model for relationships among organizational trust dimensions. 31

viii

ACKNOWLEDGEMENTS

Looking back on my graduate studies, I would like to thank those individuals who

have supported me and helped me throughout the entire process. This would not have

been possible without the love and understanding of my family, professors and

classmates.

Dr. Joe Benkowski, my advisorwho has shared his knowledge and experience

with me. You have been a true inspiration to me to keep going and stop at nothing less

than the best. Thank you for your constant encouragement and support, without it I

probably would not be where I am. Thank you for all your help and advice throughout the

writing of my research paper.

To my friends and classmates for your support, help and fun times we had.

To my parents, Cindy and Lee Dammenthank you for your constant questions

and persistence that pushed me to work harder and become the person I am today. Thank

you for instilling in me an appreciation for education and instilling its value in me. Most

of all, thank you for letting me know that when I put my mind to it, theres nothing I

cannot achieve.

And finally, to my fianc, Jim thank you for being tolerant and patient

throughout this study. Most of all, thank you for always being there to show your support

and encouragement and for always being around to make me smile.

ix

Chapter One

INTRODUCTION

Background

In recent years, there have been many companies that are downsizing due to slow

periods (Caudron, 1996). Typically, those workers that were laid off tend not to be

rehired with the same company, leaving them with no option but to start all over. This

type of company tends not to see the valu