1 Dec
2022
Motivational Effects of Feeling Trusted
I investigate how workers respond to learning that a manager trusts them less than she does their peers. In a laboratory experiment, responsibility for a manager’s earnings is divided unequally between two workers. I vary whether this responsibility allocation decision is made by the manager, or by a random device on the manager’s behalf. Importantly, being entrusted with more/less responsibility for the manager's payoff does not change the workers' wages. Despite this, I find that workers are less generous toward the manager when they are intentionally, as opposed to randomly, assigned a lower level of responsibility. This effect is mediated by the emotional response to learning that the manager chose to place her trust in the other worker. I find no positive effect of being entrusted with higher responsibility. My results demonstrate that managerial decisions that are materially irrelevant for workers can generate a negative reciprocal response if they reveal to the worker that she is less trusted relative to her peers.