The Influence of Leadership Transparency on Trust and Employee Engagement

Abstract

The analysis conducted in this paper focuses on the link between leadership transparency and fostering trust and engagement among employees using Social Exchange Theory and Leader-Member Exchange Theory as guiding frameworks. A survey was administered with 155 respondents from various sectors, where the role of leadership transparency in fostering trust and engagement was analyzed; results indicated that leadership transparency had a positive correlation with trust (r = 0.579, p = .000) and employee engagement (r = 0.593, p = .000). Additionally, trust in leadership proved to be a key predictor of employee engagement (r = 0.752, p = .000) enabling the conclusion that mediating trust is significant. Further determination through Multiple Regression Analysis showed that leadership transparency and trust were able to account for 60.3% of the variance of employee engagement. This shows that transparency has a significant role in fostering relationships within the organization. Organizations need to work on open communication, ethical leadership, and trust cultivating strategies to increase employee engagement and ultimately achieve better organizational outcomes in the long run. Within different organizational contexts, the interplay of transparency, trust, and engagement requires further exploration, particularly concerning the moderating contextual variables.