Knowledge , hierarchy and incentives : why human resource policy and trust matter

This paper analyses the motivational dimension in the firm within different organisational set-ups characterised by their levels of hierarchical pressure and two types of bonus rules, a Gaussian and a non Gaussian distribution perceived as more risky by the employees. The model shows the importance of the rules for vertical trust building. In particular, trust increases with the perception of more safety concerning the bonus. However, the degree of risk of the bonus rule distribution is not always negatively correlated to the level of profit. The model also suggests that vertical trust may prevail even in a hierarchical structure.