The impact of downsizing on trust and employee practices in high tech firms: A longitudinal analysis

The literature on trust and human resource management (HRM) indicates that these elements play an important role during periods of downsizing. In addition, researchers acknowledge that downsizing, when it occurs, is usually an industry-wide phenomenon, which gives these elements extra clout. However, the influence of managers' trust in their employees on HRM practices in the high tech industry has yet to be empirically tested. The organizations included in this research were selected from a sample of 114 organizations taken from the Israeli High Tech Guide. In the first and second waves, 43 and 34, respectively, of the 114 designated companies completed our questionnaires, resulting in a response rate of 38% and 30%, respectively. Findings indicate that trust exerted a direct effect on HRM practices and organizational performance. Possible explanations of the findings, as well as their practical implications, are discussed.