Why mutual trust leads to highest performance: The mediating role of psychological contract fulfillment

Abstract

In this study we extend the work of Brower, Lester, Korsgaard and Dineen (2009) on mutual trust by proposing and testing whether and how the interactive effects of trust in the supervisor and trust in the subordinate account for subordinates' task and contextual performance through the mediating role of psychological contract fulfillment. We tested our mediated moderation model on 182 supervisor−subordinate dyads of three service firms in Hong Kong. Results indicated that fulfillment of psychological contract fully mediated the effects of mutual trust between supervisors and subordinates on subordinates' task and contextual performance.