337 THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION IGOR IVAŠKOVIĆ 1 Received: 21 May 2014 Accepted: 14 January 2015 ABSTRACT: The purpose of this study was to examine the relationships between the perceived quality of HRM, trust among athletes, their trust in head coach, and the perceived team cohesion in the context of basketball teams from four South East European countries. First, the modified version of HRM quality scale was verified on one sample of 277 athletes from 36 clubs. Then the model was developed with the theoretical fundamentals of social exchange theory and tested on data from other sample of 282 athletes from 37 basketball clubs. Results show that the perceived quality of HRM directly affects degree of athletes’ trust in the head coach. However, it does not have a direct impact on trust among athletes, neither on team cohesion. However, athletes’ trust in the head coach mediates the indirect effect between the perception of HRM and the perceived cohesiveness within the team, and it also plays the me- diating role in the perceived HRM – trust among athletes’ relationships. Keywords: basketball, team, HRM, cohesion, trust JEL Classification: L31, M10 1 INTRODUCTION The measurement of human resource management (HRM) effects is still a challenge for scholars from a whole spectrum of organizational fields. While the identification of prac- tices which have positive impact on financial outcomes like earnings, ROA, ROE, etc. re- mains the most debated topic (Bowen & Ostroff, 2004; Ichniowski & Shaw, 2003; Pološki- Vokić & Vidović, 2008), less attention is given to HRM effects on behaviour and attitudes on micro and mezzo organizational level. An impact of the perceived HRM policies and practices on team level is from that aspect still an under-researched area, especially in the segment of sport clubs from transition countries, which operate in non-profit environ- ment. Assessing the HRM effects on financial results is not the most appropriate in case of non-profit clubs, since they are focused (or at least should be) on other aims like top sport result, contribution to local community, growth of organization, etc. At the same time, cohesiveness and trust within the organization are often considered as the key lev- erages for achievement of a whole spectrum of non-profit sport aims (Mach, Dolan, & Tzafrir, 2010; Paskevich, Estabrooks, Brawley, & Carron, 2001). Therefore, the degree of team cohesion and trust can have some kind of “common denominator” roles for HRM efficiency measures in non-profit sport clubs. This has been recognized among scholars, 1 University of Ljubljana, Faculty of Economics, Ljubljana, Slovenia, e-mail: igor.ivaskovic@ef.uni-lj.si ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 | 337-365 ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 338 which resulted in intensification of trust and cohesion studies among sport clubs in the last fifteen years (Dirks, 1999; Dirks, 2000; Mach, Dolan & Tzafrir, 2010). However, while the majority of papers focus on the consequences of those two constructs, there is still a lack of research, which would try to identify their antecedents. Given the above, the aim of this research is to make a step further in the process of disclosing the so-called “black box” phenomenon in the HRM – trust and HRM – cohesion relationships. Our intention was to measure the importance of athletes’ HRM quality perception and to identify paths through which HRM perception influences two crucial factors of team building. The ma- jor objective was to develop a framework for examining the relationships in the triangle of HRM, trust and cohesion, and then to examine the implications of the model using real- life data. This study will therefore have theoretical and practical impact. The first relates to the understanding of the relationship among observed variables, while (from practical point of view) the results should be useful to team managers in non-profit sport clubs in their ambition to increase the degree of trust and cohesiveness within their sport teams. 2 THEORETICAL FRAMEWORK AND HYPOTHESES 2.1 The context of sport clubs in South-East Europe and HRM specifics When analysing a sport club, specifics of institutional and business context of particu- lar organization should be considered. Despite the intensive process of globalization, we should be aware of the fact that sport clubs constitute a specific segment of organizations, which is more attached to its own local environment than other types. State regulations and tradition in a particular region play an important role especially in organizational process of sport clubs in Europe (Avgerinou, 2007; Fort, 2000). European sport clubs are affected by the fact that majority of European sport competition have preserved the tra- ditional system, where the best clubs in the end of the season advance in higher ranked competition, while clubs with the worst sport result drop into lower level league. Conse- quently, there are no sport clubs with exclusive right to compete in particular competition which differentiates the so-called European “open” system from the system that is used in the United States. The “closed” system enables sport clubs to have a greater degree of certainty, while European sport clubs have to preserve flexibility, due to possibility of dropping into a lower level competition. At the same time, unlike in the United States, Eu- rope does not have the system of athletes’ development incorporated into the educational system. This means that every sport club also has the development function and produces young athletes who will eventually participate in top competitions. Consequently, the ma- jority of European sport clubs have professional and amateur part of an organization. The dual nature results in mixed teams’ structures, composed of professionals and amateurs (Boxall & Purcell, 2000; Auld & Godbey, 1998). Combination of them within a team can cause many difficulties, since one part of a team is being paid for its participation and the other part is not. Therefore, the achievement of trust among teammates and team cohe- sion seems to be more challenging for coaches and managements in those clubs. I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 339 Sport clubs in Europe are traditionally, unlike their North American counterparts, closer to the non-profit sector. This is in line with EU Commission statement that sport clubs should offer sport opportunities at a local level and thus promote the “sport for all” idea (Petry, Steinbach & Tokarski, 2004). However, highly professional non-profit sport clubs that compete at the highest-level sport competitions are the specific of transition countries. This is the consequence of the unique historical development. In the centrally planned economies, all sport clubs were formed by national sports societies. Therefore, all of them were declared as non-profit and amateur organizations. The opening of athletes’ market in transition period stimulated professionalization of top sport clubs. However, in most cases, they preserved non-profit legal status. The heritage of particular histori- cal development can be noticed in the ex-Yugoslavia countries where the vast majority of sport clubs still operate as non-profit organizations regardless of their budget size or level of professionalism. However, it is important to stress that non-profitability does not prevent organizations from having a surplus of income over costs (Podlipnik, 2010). It only has to be reinvested in organizational activities. In practice, the financial flows are often difficult to control and due to poorly developed legislation, regulators often fail to prevent profit sharing among organizational members in good times. In the context of this research, non-profitability could increase the importance of observed phenomenon for couple of reasons. First, the organizational ownership structures in non-profit clubs are more complex than in their profit-oriented counterparts. Interference of numerous stakeholders usually complicates the decision processes and often results with the am- biguities in strategic goals and HRM policy. As some authors claim the absence of clear ownership, structure also increases the importance of trust and trustworthiness in those organizations (Greiling, 2007). Secondly, non-profitability usually causes higher percent- age of volunteers who are not driven by financial motives (Škorić, Bartoluci & Čustonja, 2012). Therefore, overall perception of human relations within organization should be more important factor from the aspect of building trust and cohesion in non-profit sport clubs. Additionally, from the HRM aspect sport clubs represent a special segment of non- profit organizations for couple of reasons. The most obvious is the fact that in sport clubs there are usually two separate parts of single HRM system. While the first is intended for administrative part, the purpose of other is to form competitive sport team. They dif- ferentiate regarding the role of head coach, which is significant in the second and usually minor in the administrative part. Therefore, when it comes to formation of sport team, sport clubs’ managements delegate the responsibility and decision-making power on head coach, who, in accordance with the budget constraints, can choose between two sources of athletes. According to van der Heijeden (2012), sport clubs’ teams can acquire athletes from youth selections (mostly amateurs) or athletes obtained on athletes’ market (mostly professionals). Thus, from the aspect of team forming there are two crucial processes: development of young players and scouting. In line with Tuckman’s (1965) theory of team formation, after “forming” phase, “storming” and “norming” phases follow. While the aim of “forming” is making a competitive team from the aspect of obtaining variety of skills, physical capabilities and tactical knowledge, the aim of “storming” and “norming” is to achieve as high as possible degree of team cohesiveness which produces synergy effects and enables athletes to achieve common goal. ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 340 The ambition of this study is to test the strength of causal relationships in the triangle of the perceived HRM quality, trust and cohesion in non-profit sport clubs. Placing the latter in the context of social exchange theory, which has often been criticised for reducing the social interaction to economic transaction (Zafirovski, 2005), will enable not only evalu- ation of how the observed variables influence each other, but also testing the capability of this theory to explain social interaction processes in non-profit organizations. 2.2 The HRM-trust-cohesion link Every time an individual becomes a member of certain organization, he or she faces the HRM process. This is inevitable even in those organizations, which do not have formal- ized or planned HRM system. From the aspect of individuals, those practices and ac- tivities included in HRM system represent environmental factor, which affects their emo- tions, moods, feelings and should also have impact on their behaviour within particular organization. However, Alfes and others (2013) point out that every person is unique, so intended HRM system is not crucial from the perspective of HRM outcomes. The latter depend more on the fact of how the particular HRM system is being perceived among organizational members. This is in line with McShane and Von Glinow (2003) perceptual model, in which authors explained that every stimulator from the environment has to go through the filter of individual’s perception, and only then it can have an effect on indi- vidual’ s emotions and behaviour. Therefore, in this study we examined how the perception of HRM affects two specific phenomena, which could be placed in the context of moods, attitudes and behaviour, trust and cohesive behaviour within the team. Team cohesion is the degree to which team members work together as they pursue the team’s goals. According to Carron and Brawley’s (2000) definition cohesion is a dynamic process, which enables a group to stick together and remain united in the pursuit of its in- strumental objectives and/or for the satisfaction of member affective needs. It is especially desirable in the team context where members are interdependent and generate a mutual output. Numerous studies have already confirmed that the cohesion significantly contrib- utes to a more efficient and effective functioning of organization, which is particularly noticeable in team sports (Hall, 2007; Mach, Dolan, & Tzafrir, 2010). Previous researches have also confirmed the difference between social and task cohesion (Carless & De Paola, 2000). While the latter refers to the identification with the tasks and commitment to them, the social component refers to the extent to which individuals interact socially. Carron, Widmeyer and Brawley (1985) further divided the construct based on how individual members of a group are attracted to the group and how individuals are integrated into the group, which resulted with four aspects of cohesion, namely “Individuals Attractions to the Group-Task” (IAGT), “Individual Attractions to the Group-Social” (IAGS), “Group Integration-Task” (GIT), and “Group Integration-Social” (GIS). Until now, scholars have been mostly focused on measurement of the degree of cohesion in teams and its contribution to the final result (either on team level or on the entire organiza- tion). On the other hand, few studies also tried to identify the factors that contribute to emer- I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 341 gence of cohesiveness. In that context, the construct of trust has been found as cohesion’s accelerator from both (task and social) aspects. Especially strong connection was found be- tween trust and task cohesion, which is the crucial dimension of cohesiveness in task-orient- ed groups like sport teams (Morgan & Hunt, 1994; Dirks, 1999; Mach, Dolan & Tzafrir, 2010). Regardless of many similarities, it seems that trust is a bit more complex construct than co- hesion. Trust research began in the 60s, when it was identified as a key element of teamwork (Argyris, 1962; McGregor, 1967; Likert, 1967). In the following decades, authors tried to dis- seminate studies and evaluate trust’s impact on individual and organizational level (Roberts & O’Reilly, 1974; Kirkpatrick & Locke, 1996; Langfred, 2004). In the process of examining this phenomenon, scholars faced with the issue of its definition. Trust is obviously tightly connected to couple of other feelings and is directly influenced by many factors. Since it usually manifests in the risky situation, it is often considered as closely related to willingness of someone to take risk. Indeed, those people, who are more inclined to risk-taking, usually build trustworthy relationships quicker and easier than others (Mayer, Davis & Schoorman, 1995). Trust is also often confused with unclear distinction from cooperation. However, the latter has not the same meaning, as the cooperation can also arise out of the fear from poten- tial punishment, which cannot be the source of trust. Further, trust is tightly connected with the construct of confidence in the sense that the individual must have confidence that the other individual has the ability and intention to produce it in order to develop trust relation- ship (Deutsch, 1960). On the other hand, someone can also have confidence because he or she does not consider alternatives, while the essence of trust is choosing an action in spite of possibility of being disappointed (Luhmann, 1988). This is emphasized by social exchange theory, which postulates that human relations are formed by the use of a subjective cost- benefit analysis and the comparison of alternatives (Blau, 1964). In line with this theory, the condition for trust is previous interaction of individual with other organizational subjects, where individual assesses more dimensions that form trust (Tzafrir & Dolan, 2004). The multidimensionality and domain specificity of trust has been confirmed in various studies (Zand, 1972; Zeffane & Connel, 2003). Throughout the years of examination, many scholars have tried to make a list of the most important conditions for its appearance. A short review of factors that lead to trust is presented in Table 1. Obviously the most often mentioned components of trust are ability, benevolence, and integrity. Besides the extra-trustor factors every trust relationship also depends on intra-trustor characteristics. People differentiate and some of them are more likely to trust than others. According to Mayer, Davis and Schoorman (1995) propensity to trust is a stable within- party factor that affects the likelihood this party will trust, while “ability” , “benevolence” and “integrity” are dimensions of trust that depend on trustee. Adams, W aldherr, and Sar- tori (2008) added predictability as another factor of trust to this model. It has often been considered similar to trust construct, but willingness to take a risk and the vulnerability are not present in the predictability concept. Predictability also does not imply that one person will trust the predictable person more, since the latter can be predictable in bad sense. However, in general predictability enhances trustworthiness by reducing uncer- tainty (Lewis & Weigert, 1985) and is not directly linked to other three factors. Therefore, Adams, Waldherr, and Sartori split the trust of military team members into four dimen- ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 342 sions, namely “competence” , “benevolence” , “integrity” , and “predictability” . Competence in this context represents the extent to which the person exhibits a group of skills, com- petencies and characteristics, which allow an individual to have influence. Benevolence, as the trustee’s characteristic, is the extent to which the person is seen as kind, caring and concerned, while integrity is the extent to which the person is seen as honourable honest and having strong moral principles. Finally, predictability denotes he extent to which the trustee’s behaviour is consistent and predictable. Table 1. Trust Antecedents Authors Antecedent Factors Solomon (1960) Benevolence Giffin (1967) Expertness, reliability as information source, intentions, dynamism, personal attraction, reputation Boyle & Bonacich (1970) Past interactions, index of caution (based on prisoners’ dilemma outcomes) Kee & Knox (1970) Competence, motives Farris, Senner, & Butterfield (1973) Openness, ownership of feelings, experimentation with new behaviour, group norms Jones, James, & Bruni (1975) Ability, behaviour is relevant to the individual’s needs Rosen & Jerdee (1977) Judgement or competence, group goals Larzelere & Huston (1980) Benevolence, honesty Cook & Wall (1980) Trustworthy intentions, ability Lieberman (1981) Competence, integrity Johnson-George & Swap (1982) Reliability Hart, Capps, Cangemi & Caillouet (1986) Openness/congruity, shared values, autonomy/feedback Butler (1991) Availability, competence, consistency, discreetness, fairness, integrity, loyalty, openness, promise fulfilment, receptivity Sitkin & Roth (1993) Ability, value congruence Mayer, Davis, and Schoorman (1995) Ability, benevolence, integrity Tzafrir & Dolan (2004) Reliability, harmony, concern Adams, Waldherr & Sartori (2008) Benevolence, integrity, competence, predictability I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 343 Trust and cohesion are often considered as similar constructs, but close examination re- veals a couple of differences between them. While cohesion is intergroup phenomenon, trust can be built upon a person, place, event or object, between two or more individuals (Johnson-George & Swap, 1982; Mayer, Davis, & Schoorman, 1995), between two or more organizations (Gulati, 1995), individuals and organizations (Zaheer, McEveily, & Perrone, 1998) etc. In other words, trust is context dependent phenomenon, which demands analy- sis from different perspectives, depending on relationship that is in the focus of particular research (Gillespie & Dietz, 2009; Laeequddin, Sahay, Sahay, & Waheed, 2010; Shockley- Zalabak, Ellis, & Winograd, 2000). Consequently, unlike cohesion trust construct can have several foci within the same team. This implies that cohesion is usually measured on team level, while trust is being measured in the context of various interpersonal relation- ships. Athletes within sport clubs also form trust relationships towards different positions in the organizational structure and sport literature suggests at least the differentiation be- tween two inter-team relationships, namely trust among athletes and trust in the relation- ship athletes – head coach (Tzafrir, 2005). The second difference between cohesion and trust, which is in the context of this study even more important, is the fact that trust is a construct within individual upon other person or group of persons, while team cohesion is actually perception of how the group members behave within the group in relation with other members. Thus, trust can be denoted as emotional construct, while cohesion is more a behavioural phenomenon. Trust in other organizational subjects is in positive relation with behaviour at the work- place and is also connected with the HRM system in particular organization. This has been confirmed by Tzafrir (2005), who found out that trust stimulates certain HRM prac- tices and vice versa. The literature also provides empirical evidences that HRM and trust have similar positive effects on work behaviour, including organizational citizenship, em- ployee performance, open communication, team commitment and finally also on team performance (Dirks, & Skarlicki, 2009; Hempel, Zhang, & Tjosvold, 2009; Tzafrir, 2005). Indicatively, scholars also proved that perception of HRM quality and high degree of trust cause similar consequences and positively affect organizational success (Becker & Huselid, 1998; Delaney & Huselid, 1996; Huselid, 1995; Mach, Dolan, & Tzafrir, 2010). However, it is still relatively unclear in which direction the relationship between perception of HRM and trust works. This causal relationship probably works in both ways, but the fact is that HRM policies and practices exist before individual becomes a member of a sport club. As Searle and Skinner (2011, p. 4) state: “HRM is about structuring the interaction of hu- man beings within an organizational context in order to maximize performance” . In other words, this means that HRM sets the context for building trust relationships. Indeed, the effectiveness of information flow from top management towards other organizational members depends on particular HRM system within the club. Therefore, this system is among else also responsible for maintaining good human relations in the organization, which includes building trustworthy relationships among organizational members. This can be presumed from Snape and Redman’s (2010) definition of HRM system, which is according to them a set of interconnected activities, designed to ensure that employees have a broad range of superior skills and abilities. However, although usually the most im- portant aim of HRM is to increase the level of competences and knowledge within organi- ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 344 zation, it has much wider spectrum of effects. The latter are usually divided on three seg- ments, namely: employee skills, employee motivation and empowerment (Conway, 2004; Wright & Boswell, 2002). Thus, the perception of HRM should not have impact only on ability, but also on other trust factors as integrity, benevolence and predictability (Jackson & Schuler, 1995). In line with that, it is reasonable to presume that specific HRM practices in basketball clubs in the role of “environmental stimulator” influence the perception of HRM quality among athletes, which affects their trust in other organizational subjects. Therefore, we set the first two hypotheses. Hypothesis 1: The perceived quality of HRM has direct positive effect on the degree of trust among athletes. Hypothesis 2: The perceived quality of HRM has direct positive effect on the degree of athletes’ trust in head coach. In this study, we analyse the impact of the perceived HRM on athletes’ trust in two spe- cific trustees, namely other athletes and head coach. Since the latter do not have the same amount of responsibility for HRM implementation, it is reasonable to expect that the HRM impact will differentiate on those two relationships according to the trustee’s re- sponsibility for HRM implementation. Usually top managers are designers of organiza- tional structure and strategy, including HR strategy (Creed & Miles, 1996). On the other hand, according to Lago, Baroncelli, and Szymanski’s (2004) model of production process in sport clubs, head coach is the organizational subject with the highest degree of respon- sibility in day to day HR activities, which affect athletes, and has lot of manoeuvring space for shaping the nature of HRM system. Therefore, head coach should be (at least from ath- letes’ perspective) the most important organizational subject for implementation of club’s HRM policies, while athletes participate only in implementation phases as executors. In line with that assumption, head coach should get the largest part of athletes’ gratitude or criticism for good or poor design and implementation of HRM practices. This conse- quently means that the perceived HRM should affect more athletes’ trust in head coach than the degree of trust among athletes. Hypothesis 3: The perceived quality of HRM has stronger effect on the degree of athletes’ trust in head coach than on trust among athletes. According to social exchange theory, organizations are forums for social (and economic) transactions (Cropanzano, Prehar, & Chen, 2002). Also in line with that theory team ef- fectiveness is a result of interaction, coordination and collaboration between team mem- bers (Hackman & Morris, 1975), while trust is seen as the crucial factor in the processes of social exchange (Blau, 1964). In the context of sport teams, trust enables an individual athlete to have positive feelings and perceptions regarding other team members (athletes and head coach) and at the same time stimulates the subject to be open, reliable and con- cerned for others. This should also stimulate the positive cycle of reinforcement within the team, which could be the reason for the increase of team cohesiveness. The literature offers the explanation for the latter effect, saying that the degree of trust differentiate teams I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 345 with high level of trust from those teams with lack of trust at the time of increased risk. In those critical moments, trust affects team members to accept their role and to per- form even those unpleasant tasks that are necessary to win (Dirks, 2000; Mayer, Davis, & Schoorman, 1995). Trust indeed provides the belief that one team member can predict and understand others and vice versa, it reduces perception of risk, vulnerability, and un- certainty, which helps every team member to focus on his task in the context of teamwork. Those, who do not trust in other organizational subjects, work less effectively (Dirks & Ferrin, 2001). Positive link between trust and cohesion has already been found in previous studies (Hansen, Morrow, & Batista, 2002; Luria, 2008), and has been confirmed in exami- nation of team dynamics within sport clubs. Mach, Dolan, and Tzafrir (2010) examined the relationships in clubs from various sports industries and found that trust among team members is an antecedent for team cohesion. Dirks (1999) made a study among NCAA basketball teams and also confirmed the positive trust – cohesion relationship. In line with that, we also expect that perception of team cohesion is going to be positively affected by the degree of trust among team members (athletes and head coach). Therefore, we formu- late the fourth and fifth hypothesis as follows. Hypothesis 4: The perceived team cohesion is directly positively affected by degree of trust among athletes. Hypothesis 5: The perceived team cohesion is directly positively affected by degree of athletes’ trust in head coach. In line our argumentation for previous five hypotheses, it would be reasonable to predict the positive relation between HRM and team cohesion relationship. The positive between those two constructs has already been indicated by previous studies. It was found that HRM and cohesion both correlate with the same constructs, namely: trust (Tzafrir, 2005), organizational success (Becker & Huselid, 1998; Huselid, 1995) and sport result (Mach, Dolan, & Tzafrir, 2010). The positive link can also be explained with argument that the HRM process is responsible for maintaining good human relations in the organization with the mission to stimulate group of people to achieve common goal. The latter is very close to the Carron and Brawley’s (2000) definition of cohesiveness, so we can assume that one of the HRM aims should be also an achievement of higher degree of team cohesion. On the other hand, the fact is that by now, there has not been found a direct relation- ship between HRM perception and team cohesiveness, only indirect causal link has been proved. In that context, we should not forget that perceived cohesiveness is the perception of how good do team members work together. Therefore, team cohesiveness is actually perception of behavioural consequence, which is not the primary effect of HRM quality perception. This could be the explanation that the perceived HRM quality – team cohesion relationship works indirectly through the third construct, which is in direct causal relation with both constructs. Trust is within person construct, which we expect to be predictor of team cohesion and at the same time the perceived HRM quality consequence. Since athletes’ perception of HRM quality is shaped through every day practices, it should also be linked to attitudes that athletes form in relation with subjects that implement HRM, namely head coach and other athletes within the team. Previous studies also reported sig- ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 346 nificant relationship between coaching behaviour and team cohesion (Gardner, Shields, Bredemeier, & Bostrom, 1996). Therefore, we propose that the perception of HRM quality positively influences athletes’ trust in those subjects that are responsible for implementa- tion of tasks determined by HRM policy, and that trust mediates this effect and stimulates the degree of cohesiveness, especially its task dimension. Thus, we suggest the final two hypotheses. Hypothesis 6: Athletes’ trust in head coach mediates the effect between the perception of HRM quality and team cohesion. Hypothesis 7: Trust among athletes mediates the effect between the perception of HRM quality and team cohesion. All seven hypotheses form conceptual framework summarized in Figure 1. Figure 1. Hypothesized model of positive causal relationships 3 METHODS 3.1 Sample and data collection Recognizing the fact that each sport industry has its own HRM peculiarities, this research was performed on athletes only from male basketball teams. This improves usability of study results for basketball clubs’ managements, and at the same time enables future iden- tification of the differences between the characteristics among different sport branches. Since the objective of this study was to explore how the perceived quality of HRM influ- ences the development of trust and cohesiveness on team level, the focus of research was on observation of the whole team as a unit. Before conducting a final research 30 inter- views with basketball players were held to pre-test the survey questionnaire. Then, 108 men basketball clubs from Bosnia and Herzegovinian, Croatian, Serbian, and Slovenian national leagues (regardless of level of competition) were contacted by our researcher, PERCEIVED HRM QUALITY TRUST AMONG ATHLETES ATHLETES‘ TRUST IN HEAD COACH PERCEIVED TEAM COHESION I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 347 who explained the purpose and methods of research. Participation was completely vol- untary and anonymous; each participant was free to withdraw at any part of the survey. The data collecting took place through the whole 2013/2014 season, in each team at the end of practice, never immediately after a competition in order to avoid competition- specific biases. The questionnaires were completed under supervision of researcher, who stressed the importance of independent responses. Consequently, basketball players com- pleted their questionnaires on their own without communication with their teammates or their coach. Finally, athletes from 73 clubs were willing to participate in research (67.6 %). Since each basketball team consists of 12 athletes, we can suppose that there are 1296 basketball players altogether in 108 clubs. 559 or 43.13% (7.66 in average per team) of them completely filled out the questionnaire. This represents sufficiently large sample ac- cording to HRM literature (Pološki-Vokić, 2004; Huselid, 1995; Becker & Huselid, 1998). The participants were in average 22.17 (standard deviation (SD) = 4.73) years old and had in average 4.81 (SD = 4.62) years of experiences with playing for current club in senior competitions. Similarly, high variation was noticed in the athletes’ average tenure with current head coach. It averaged 2.45 years with the SD of 2.49. Due to the fact the new HRM quality scale was used in this study, the sample of 73 clubs was randomly split into two subsamples, and then the sample A was used to verify new scale, while second sample was used to test hypothesized model. Sample A (for the HRM quality scale verification) consisted of 36 (277 athletes) and sample B (for testing hypothesised model) consisted of 37 (282 athletes) clubs. Athletes in sample A had 22.05 (SD = 4.72) years, were 4.40 (SD = 4.52) years in current club and cooperated with current coach for 2.20 (SD = 2.43) years. Athletes in sample B were in average 22.29 (SD = 4.77) years old, played for current club 5.04 (SD = 4.44) years and were 2.66 (SD = 2.34) years with current head coach. 3.2 Measures Group cohesion The perception of cohesiveness among team members was assessed on the basis of a “Group Environment Questionnaire” (GEQ) developed by Carron, Widmeyer, and Braw- ley in 1985. This is a self-report questionnaire that contains 18 items and assesses four as- pects of cohesion, namely “Individuals Attractions to the Group-Task” (IAGT), “Individu- al Attractions to the Group-Social” (IAGS), “Group Integration-Task” (GIT), and “Group Integration-Social” (GIS). Previous studies (Carron & Brawley, 2000; Li & Harmer, 1996) provided evidence of the scale validity and its usefulness in the sport team context. How- ever, when analysing sport teams, scholars suggest the use of only two task components (IAGT and GIT) (Li & Harmer, 1996; Hogg, Abrams, Otten, & Hinkle, 2004), since previ- ous studies among basketball and other sport clubs have repeatedly stated that the other two social components of cohesion have significantly less impact on the performance of the team (Carron, Bray & Eys, 2002; Carron & Brawley, 2000). Consequently, 4 out of 9 claims in our questionnaire measured IAGT, while 5 claims measured GIT dimension. Responses were provided on 7-point Likert scale anchored at the extremes by “strongly disagree” (1) and “strongly agree” (7). 6 claims were reverse coded. The internal consist- ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 348 ency of particular cohesion scale for data obtained in this study was computed. Cronbach’ s alphas scored .77 (sample A) and .76 (sample B) (overall α = .77), which indicates that the cohesion scale possessed sufficient level of reliability (Nunnally, 1978). Then confirmatory factor analysis (CFA) was conducted on whole sample to test, if the scale really captures both task cohesion dimensions. Results did not support a single factor structure, since comparative fit index (CFI = .86), non-normed fit index (NNFI = .76) and normed-fit index (NFI = .84) were all below .9 threshold. Moreover, root mean squared error of ap- proximation (RMSEA = .11) was above threshold of .10, which suggests that particular structure of the model doesn’t represent a good approximation. On the other hand, a two- factor structure (CFI = .96, NNFI = .93, NFI = .94, RMSEA = .06) scored much better in all parameters. Therefore, we concluded that team cohesion in particular research was the construct of two factors. Trust For the purpose of this study, we used Adams, Waldherr, and Sartori’s (2008) trust scale. It has been developed in the context of military units, which have been found to operate un- der similar conditions as sport teams. This scale was also preferred by basketball athletes who were included in pre-test survey, mostly due to inclusion of “competence” dimension, which is considered as crucial for trust measurement among task-oriented teams. Unlike some previous HRM studies (McAllister 1995; Dirks, 2000; Tzafrir & Dolan, 2004; Mach, Dolan & Tzafrir, 2010), the ambition of this research was to measure the same construct on two different relations. Therefore, we used single questionnaire tool and the scales were modified only by adjusting referent person to “teammates” and “head coach” . Responses were provided on 7-point Likert scale anchored at the extremes by “strongly disagree” (1) and “strongly agree” (7). Once again, we conducted CFA to test, if two trust relationships form two different constructs. Results did not support a single (CFI = .62, NNFI = .55, NFI = .61, RMSEA = .17) or a two-factor structure (CFI = .83, NNFI = .80, NFI = .81, RMSEA = .11), but obviously the latter achieved better score in all parameters. However, relatively low fit indexes indicated poor fit and the possibility that those two constructs form more sub-constructs. Since original trust questionnaire included four dimensions of trust, we conducted second order CFA. This time the model was formed of two-second order fac- tors with four first order factors each. Results (CFI = .91, NNFI = .89, NFI = .89, RMSEA = .08) were not perfect, since NNFI and NFI scored below .9 threshold, but were acceptable on the basis of CFI and RMSEA. Overall reliabilities in cases of all trust scales were much above recommended .75 thresholds. Cronbach’s alphas for trust among athletes were .91 (sample A) and .92 (sample B), while alphas for athletes’ trust in head coach scored .94 (sample A) and .95 (sample B). Perceived HRM quality Perceived HRM quality scale has been built according to Gould-Williams and Davies’s (2005), and Gonçalves and Neves (2012) recommendations. They have developed two I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 349 different scales, which both proved high reliability and validity and showed applicability in various industries (Gould-Williams, 2003; Gould-Williams & Davies, 2005; Gonçalves & Neves, 2012; Alfes et al., 2013). However, since non-profit professional sport clubs in transition countries operate in specific circumstances, we wanted to develop special scale, which would be the most appropriate for capturing athletes’ beliefs and attitudes in those organizations. Therefore, we organized a discussion between 11 basketball players and 11 experts from the field of HRM in sports clubs (5 head coaches, 5 sports directors and one sports psychologist). Each of them had at the time of discussion at least 5 years of work experiences in basketball clubs. Every member of work group got the Gould-Williams and Davies’s as well as Goncalves and Neves scales, and then had to reconsider their state- ments and to modify them if necessary. Eventually every member came up with proposi- tion of his measurement scale. The final list of ten distinct HRM phases was the result of combining similar phases: 1) scouting, 2) negotiating, 3) selection, 4) training, 5) game strategy, 6) game leadership, 7) performance evaluation, 8) financial compensation, 9) non-financial compensation and 10) way of leaving the club. Basketball players had to evaluate the quality of practices in each phase. They provided responses on 7-point Likert scale, where higher scores indicated a more positive response. The scale was anchored at the extremes by “the practices in this HRM phase are extremely poorly defined and poorly implemented” (1) and “the practices in this HRM phase are extremely well defined and perfectly executed” (7). In order to assure measurement of different constructs, we conducted bivariate correlation analysis between perceived quality of ten HRM phases (Appendix 1). Results showed that high correlations (correlation coefficient > .7) existed in the triangle of “trainings” , “game strategy” and “game leadership” , other significant cor- relation coefficients scored lower values. Moreover, only among those three variables the “variation inflation factor” calculation indicated potential for multicollinearity problem (VIF > 3). This indicated possibility that phases 4, 5 and 6 from athletes’ perspective in fact form single HRM phase, so we conducted three confirmatory factor analyses (CFA) in order to test which structure of HRM construct fits best to our data. According to Hu and Bentler’s (1999) recommendations results supported 8-factor structure (CFI = .99, NNFI = .96, NFI = .98, RMSEA = .07), where phases “trainings”, “game strategy” and “game leadership” were aggregated in one variable (new variable was named “training and game leadership” (TGL)). On the other hand, single and 10-factor structures were found not to fit data well, due to low fit indexes (CFI, NNFI and NFI < 0,9) and high RMSEA ( > .10). Cronbach’s alpha (.91) confirmed reliability of the “TGL ” factor, while overall HRM scale alpha scored .83. Control variables Athletes, who participate in sport teams, do not operate in a vacuum. When analysing feelings about their teammates, we have to be aware of variety of factors, which could in- fluence those relations. Of course, it was impossible to include all of them in this analysis, so we decided to take into account two, which could (according to social exchange theory) have the strongest influence on the causal relationship between perceived HRM quality, trust and cohesion: ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 350 • Number of seasons in a team – the number of years that particular athlete has been member of current team. According to the definition of trust given by Doney and Cannon (1997), trust requires an assessment of the other party’s credibility and be- nevolence. One party must have information about other party’s past behaviour and promises, which usually takes some time. Thus, larger number of seasons that athletes participate in particular team, could enable each of them collecting more information about other athletes and head coach within this team; • Seasons trained by coach – an average number of years that an athlete in team has been cooperated with current head coach. Similarly as number of seasons in the club, num- ber of seasons trained by the coach might be related to the degree of trust between athletes and head coach. 3.3 Data analysis Since data for all observed variables in our hypothesized model were collected from a single source, we had to consider the problems of common method variance and discri- minant validity. In order to control the influence of common method bias, we decided to perform set of CFAs on both samples. Following the recommendations established in previous studies (Hu & Bentler, 1999; Hair et al., 2005; Alfes et al., 2013) we tested how the whole model with all latent variables fits our data according to three parameters: chi- squared, CFI and RMSEA. Overall the model exhibited good fit in both samples (A: χ2 = 1693; df = 765; RMSEA = .05; CFI = .96; B: χ2 = 1531, df = 765, CFI = .97, RMSEA = .05). Also all standardised regression coefficients in the model were highly significant at the .001 level. In the next step we conducted so called “common latent factor test” (also known as Harman’s single-factor test) recommended by Podsakoff and others (2003). The new factor was included in the model and all variables were allowed to load onto one gen- eral factor. In this case the model exhibited extremely poor fit for both subsamples, which indicates that single factor did not account for the majority of variance in our data (A: χ2 = 22285; df = 775; RMSEA = .23; CFI = .46; B: χ2 = 20503, df = 775, CFI = .37, RMSEA = .28). In the next phase, the discriminant validity test according to Fornell and Larcker (1981) was conducted, in order to test if our constructs in proposed model are distinct from each other. According to Fornell and Larcker (1981) scale variables are enough dif- ferent from one another, if each scale’s average variance extracted (AVE) is greater than its shared variance with other variables in the same model. The test was conducted in both subsamples, which confirmed that all scales were distinct from each other (see Appendix 2 and 3). Finally, since the unit of observation in this study was team, we had to aggregate individual perceptions of team cohesion, trust and perceived HRM quality within each team. In order to justify the aggregation, we conducted an ICC analysis for each team. The latter uses one-way ANOV A test to compare within and between team variances and helps us to assess whether membership in a certain team leads to more homogenous answers (McGraw & Wong, 1996). The ICC coefficients ranged from .77 to .91, which suggests excellent reliability. I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 351 4 RESULTS Following the aim of providing a clear overview of relationships between perceived qual- ity of HRM, trust and team cohesion we first conducted the correlation analysis for all variables on team level for subsample B. Table 2 presents the means, standard deviations, correlation coefficients and p-values for observed variables. The pair analysis provides a direct picture of the relationship between perceived team co- hesion, overall the perception of HRM quality and two trust constructs. As expected, team cohesion showed strong correlation with trust among athletes (r = .51, p < .01) and trust in head coach (r = .55, p < .01), while the correlation coefficient with perceived HRM quality (r = .36, p < .05) was significant at level of .5. We can also see that both trust constructs showed significant positive correlation with perceived HRM quality. At the same time, we cannot claim that certain component of trust has significantly stronger correlation with HRM quality than others. Further, although both trust - HRM quality relationships were shown to be significant, it seems that association between perceived HRM quality and ath- letes’ trust in head coach is stronger than HRM quality - trust among athletes relationship. Interestingly, except in the case of perceived HRM quality – “seasons with coach” (r = .33, p < .05), control variables did not show any significant correlation with main variables. However, as expected, they were in positive correlation with each other. In general, these findings are consistent with reports on correlation from previous re- search, which claimed that trust within the team is related to the construct of team co- hesion (Dirks, 1999; Morgan & Hunt, 1994; Mach, Dolan & Tzafrir, 2010; Costa, 2003; Schippers, 2003). Like Mach, Dolan, and Tzafrir’s (2010) findings, our results also indicate strong positive correlation between trust among athletes and trust in head coach. How- ever, correlation analysis did not provide strong evidence for the conclusions on the con- nection between team cohesion and perceived HRM quality. ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 352 Table 2. Means, SD, correlation coefficients for sample B (N = 37) Variables M SD 1 2 3 4 5 1. HRM quality 4.48 .63 2. Trust among athletes: 5.57 .48 .31* a) Benevolence 5.86 .51 .34* .43** b) Integrity 5.64 .47 .10 .46** c) Predictability 5.20 .57 .29 .31* d) Competence 5.61 .58 .36** .58** 3. Trust in head coach: 5.85 .60 .50** .51** a) Benevolence 6.06 .55 .51** .48** .51** b) Integrity 6.02 .61 .44** .50** .53** c) Predictability 5.32 .62 .25 .56** .42** d) Competence 6.00 .87 .57** .37* .54** 4. Cohesion 4.68 .69 .36* .51** .55** 5. Seasons in club 4.42 2.86 .08 -.05 -.08 .16 6. Seasons with coach 2.77 1.52 .33* -.07 -.23 -.01 .37** ** P < .01 * P < .05 With ambition to understand the associations between observed variables better, we per- formed structural equation modelling (SEM) using maximum likelihood estimation in IBM AMOS 21, and followed recommendations of Bollen (1990), Hu and Bentler (1999), and Tzafrir (2005) for evaluating model fit. SEM was selected due to advantages over mul- tiple regression analysis, mostly its ability to evaluate complex models. It enables testing model globally rather than coefficients individually and also enables inclusion of mediat- ing variables into the model (Joreskog & Sorbom, 1993; Mach, Dolan & Tzafrir, 2010). The results showed that initial model did not fit data very well. NFI and NNFI were below .9 thresholds, while RMSEA was above .10. Moreover, the p-value was below .05, indicating that the model is not well specified for this data set (Keats & Hitt, 1988). Therefore, we followed the suggestions of Alfes and others (2013) and tried to find alternative model, which would improve the fit. First we wanted to find out whether there is a direct link between the perceived HRM quality and the perception of team cohesion, so we tested Model 2, in which we added a direct path from those two variables. As Table 3 shows the model fit did not improve at all, rather the opposite. Moreover, the standard regres- sion coefficient between the perceived HRM quality and the perception of team cohesion was insignificant, so we abandoned the possibility of direct HRM quality impact on team cohesiveness. For alternative Model 3 the direct path from athletes’ trust in head coach I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 353 to trust among athletes was added in order to test whether there was a direct association between those variables. This was suggested by Mach, Dolan, and Tzafrir (2010) and is in line with the argument that head coach has the most important role in process of team structuring, especially in the process of athletes’ selection. Therefore, higher degree of trust in head coach and his/her decisions should lead also to higher degree in athletes that he or she selected. This time the model fit improved significantly and satisfied the conditions for the conclusion that the Model 3 is consistent reflection of the relationship between the perceived HRM quality, athletes’ trust in head coach, trust among athletes and perception of team cohesiveness. However, regardless of good fit indices, this model showed that the standardized regression coefficient between perceived HRM quality and trust among athletes was not significant (r = .09, p = .547). Therefore, we removed this path from the Model 4, which caused the additional improvement of model fit. Additionally, we also performed SEM for all other alternative models of relationship between observed variables and have not found one, which would show better fit to our data. Thus, results suggested that the Model 4 shown in Figure 2 is the best reflection of the relationship between observed variables for this data set. Figure display standardized parameter estimates, statistical significance tests for each path and squared multiple correlations for dependent variables. Table 3. Structural Equation Model Comparisons – sample B Model χ2(df) p CFI NFI NNFI RMSEA Initial 54.959(37) .029 .93 .89 .81 .12 Model 2 54.114(36) .027 .92 .82 .89 .12 Model 3 38.078(35) .331 .99 .92 .98 .05 Model 4 38.472(36) .360 .99 .93 .99 .04 Initial – hypothesised model Model 2 – added direct path from the perceived HRM quality to perceived cohesion Model 3 – added direct path from trust in head coach to trust among athletes Model 4 – direct path from trust in head coach to trust among athletes and erasing the path from the perceived HRM quality to trust among athletes Obviously, our findings undermined some of our hypothesized statements, but at the same time provided proof for some of predicted causal relationships between observed variables. Firstly, results confirmed strong influence of HRM quality on athletes’ trust in head coach, which is in line with our hypothesis 2 and secondly, both observed trust relationships were found to significantly contribute to the perception of team cohesion, which confirms our hypotheses 4 and 5. Moreover, 46% of variance in team cohesion was explained by those two trust predictors. Further, the perception of HRM quality was found to have much stronger effect on athletes’ trust in head coach than on trust among athletes as we had predicted in hypothesis 3. Although we did not find the direct impact of the perceived HRM quality on trust among athletes (which contradicts to our hypotheses 1 and 7) and team cohesion, Model 4 indicated that both causal relationships could work indirectly. It seems that the degree of athletes’ trust in head coach plays the crucial mediating role in both cases. ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 354 Figure 2. SEM results for Model 4 (sample B) In order to verify our hypothesis 6 and to test other potential mediation paths, we conducted additional mediation tests. When there is a full mediation in the relationship X-M-Y (where X is predictor, M is mediator and Y is dependent variable), all paths (X-M, M-Y and X-Y) are significant. Addition of the X-M and X-Y paths to the constraint model should not improve the fit (Mach, Dolan, & Tzafrir, 2010). On the other hand, when there is only indirect me- diation effect, direct path X-Y is not significant. After analysis of each potential mediation relationship in the Model 4, we checked their significance with Sobel’s test. The results presented in Table 4 revealed that HRM quality indeed affected trust among athletes and team cohesion, but only indirectly through athletes’ trust in head coach. However, the effect was significant only at level of .05. We also found that certain amount of athletes’ trust in head coach’s effect on team cohesion was mediated through the trust among athletes. Sobel’s test showed that this was a full mediation. Table 4. Mediation tests for Model 4 Mediator X Y Type of mediation Sobel’s test Trust in head coach Perceived HRM quality Team cohesion Indirect z = 2.27; p = .023 Trust in head coach Perceived HRM quality Trust among athletes Indirect z = 2.17; p = .030 Trust among athletes Trust in head coach Team cohesion Full z = 2.28; p = .022 PERCEIVED HRM QUALITY TRUST IN HEAD COACH TRUST AMONG ATHLETES PERCEIVED TEAM COHESION .30 .55** .73** .53 .32* .45** .46 ** P < .01 * P < .05 I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 355 Finally, we can summarise that our findings supported 5 out of initial 7 hypotheses as shown in Table 5. Table 5. Hypotheses verification Hypothesis Finding 1 The perceived quality of HRM has direct positive effect on the degree of trust among athletes. Not supported* 2 The perceived quality of HRM has direct positive effect on the degree of athletes’ trust in head coach. Supported 3 The perceived quality of HRM has stronger effect on the degree of athletes’ trust in head coach than on trust among athletes. Supported 4 The perceived team cohesion is directly positively affected by degree of trust among athletes. Supported 5 The perceived team cohesion is directly positively affected by degree of athletes’ trust in head coach. Supported 6 Athletes’ trust in head coach mediates the effect between perception of HRM quality and team cohesion. Supported 7 Trust among athletes mediates the effect between perception of HRM quality and team cohesion. Not supported * Not found a direct effect, but there was an indirect influence of the perceived HRM qual- ity on trust among athletes with the trust in head coach in mediating role. 5 DISCUSSION AND CONCLUSIONS The purpose of this research was to develop and test the model of how the perceived quality of HRM affects the degree of athletes’ trust in their teammates and head coach in the context of basketball teams and, further, how the relationship between perceived HRM quality and perceived team cohesiveness is mediated through trust. Results did not completely support our theoretical framework, but, on the other hand, they confirmed the general thesis that perceived HRM quality affects athletes’ trust and has indirect influence on team cohesion. The findings confirm the positive relationship between HRM quality and athletes’ trust and provide empirical support for the overall conclusion that better perception of HRM quality increases the degree of trust within teams. This is in line with previous findings on positive HRM quality - trust correlation (Huselid, 1995; Tzafrir, 2005) and with the thesis that high level of trust is related with the positive perception of HRM (Condrey, 1995). On the other hand, the results indicate that perception of HRM quality does not affect in the same manner trust among athletes and athletes’ trust in head coach. The perceived HRM quality affects the process of trust building among athletes only indirectly, while trust in ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 356 head coach is influenced directly. The latter also plays mediating role between perceived HRM quality and trust among athletes. Since head coach implements the majority of HR practices on day-to-day basis, this finding seems reasonable and is also consistent with the results reported in previous studies (Dirks, 1999; Dirks, 2000; Mach, Dolan & Tzafrir, 2010; Webber, 2008). From the aspect of trust – team cohesion relationship, this study confirmed that trust is indeed a strong predictor of team cohesion. Trust among athletes has been found to be in the tightest relation with the construct of team cohesion. At the same time athletes’ trust in head coach showed significant impact on team cohesion, but only at the significance level of .05. Overall, we can conclude that higher level of trust among athletes is the strongest stimulator for athletes within the team to work more cooperatively in order to achieve common goals, which is in line with previous results that claimed trust is an important factor in the context of interactive teams (Costa, 2003; Dirks, 1999; Mach, Dolan, & Tzaf- rir, 2010; Schippers, 2003; Webber, 2008). 5.1 Theoretical implications The major contribution of this study is that it explains how the perceived HRM quality contributes to the two crucial trust relationships from athletes’ perspective and how do those effects reflect on team cohesion. It also operationalizes a multifocal conceptualiza- tion of trust, offers detailed insight in the construct and explores the mediating role of trust between perceived HRM quality and team cohesion. This study provided additional empirical support to the growing body of empirical literature on the trust – cohesion relationships within sport organizations. At the same time, this is one of only a few stud- ies, which examined the HRM – trust relationship on team level and is, according to the knowledge of author, the first attempt of perceived HRM quality – team cohesion causal link analysis. This study accepted the call of some scholars (Alves et al., 2013; Nishii et al., 2008; Den Hartog, Boselie & Paauwe, 2004) and tried to capture the perception of HRM from the perspective of employees and was therefore focused on experiences and subjec- tive opinions, rather than on intended HRM strategies and practices from the view of HRM managers. We brought together two separate bodies of literature (HRM - trust and trust - cohesion) and demonstrated that trust is the important element of the link between the experienced HRM and team cohesion. This study placed the observed relations in the context of social exchange theory and confirmed that trust in direct superior plays the crucial role of mediator between the per- ceived HRM quality among employees and their trust in co-workers. Trust in head coach was found to be also the mediator in the causal relation between perceived HRM quality and team cohesion. Earlier research has shown that HRM has significant impact on beliefs of an individual employee (Sun, Aryee & Law, 2007; Allen, Shore, & Griffeth, 2003), and that the positive HRM practices positively correlate with trust within individuals (Tzafrir, 2005) and their perception of superiors (Alfes et al., 2013). In addition, several studies managed to prove the connection between trust on some elements of cohesive behaviour I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 357 on individual (Mayer, Davis, & Schoorman, 1995) and group level (Mach, Dolan, & Tza- frir, 2010). With merging those arguments together, we develop some hypotheses in the triangle HRM quality, trust and cohesion relationship on team level. Our data suggest that trust in superior is indeed the crucial mediator between perceived HRM quality and trust among athletes, and between HRM quality and team cohesion. This new finding is certainly not a surprise and is consistent with predictions made in HRM literature which assumed direct positive influence of HRM on emotions and attitudes (Snape & Redman, 2010; Searle & Skinner, 2011; Alfes et al., 2013) and indirect effect on behaviour (Tza- frir, 2005; Allen, Shore, & Griffeth, 2003). This is also in line with the theory of social exchange, which suggests that where members of an organization feel that the decision- makers within organization try to invest in them through the positive HRM experience, they are more willing to trust in their superiors. However, the only positive perception of HRM is not enough to directly influence the trust among co-working athletes on team level. The HRM quality effect is perceived through the construct of trust in direct superior, who implements the HRM practices on day-to-day basis and has influence on the rise of trust among co-workers and their cohesive behaviour. In the context of social exchange theory, this research provided proof of its usefulness within non-profit sport clubs. Study results also indicate that social interaction between two subjects within organization does not have only reciprocal effects, but externalities on other relations as well. This is especially important within organizational units where, like in sport team, it is difficult to distinguish individual effects on team task and where unit members share responsibility for success. However, the theory does not give satisfy- ing explanation about why the perception of superior behaviour from HRM aspect does not have direct influence on the perception of co-workers behaviour from the aspect of cohesion. 5.2 Practical implications Several practical implications arise from this study. Although generally we can say that positive perception of HRM stimulates trust within teams, it is important to emphasize that the HRM quality effect on particular trust relationship differentiates regarding the HRM role that certain trustee has from the trustor’s perspective. Therefore, the HRM - trust mechanism works different in each trust relationship. Since the head coach usually has more power than athletes do in determination of HRM nature, the effect on athletes’ trust in head coach is bigger than the impact on trust among athletes. Obviously, in the context of sport teams, head coaches have important role in the process of HRM im- plementation, which is in line with claims of Bowen and Ostroff (2004). While positive experience of HRM by itself is insufficient to generate high degree of trust among athletes or high level of cohesiveness, athletes’ trust in head coach helps to transfer its effects. This findings support the argument that head coach in competitive sport teams is much more than just direct superior, who only implements the HRM strategies and policies. Head coach has indeed a lot of manoeuvring space for shaping the nature of HRM, and has therefore the power to transfer the HRM effect on trustworthiness among athletes and ECONOMIC AND BUSINESS REVIEW | VOL. 16 | No. 3 | 2015 358 consequently on cohesive team-work. This is in line with some claims (e.g. Torrington, Hall & Taylor 2005) that those employees, who do not trust in their superiors, will make ineffectual the work of any HRM system. Head coaches should be aware that quality of HRM practices that athletes experience on day-to-day basis appears to be a crucial factor for earning trust of their athletes. Moreover, head coaches should be aware of the importance of trust they enjoy among athletes within the team, because the latter is a generator of trust among athletes and team cohesion, which have been repeatedly proved as the stimulators of team success (Mach, Dolan & Tzafrir, 2010; Dirks, 1999). This is especially important for organizations where co-work- ers are in competitive-cooperative relations as is the case in basketball teams. Indeed, each athlete in a basketball team has to cooperate with his teammates, but in order to be in the position to participate in the game, athlete has to earn the minutes on the basketball court. Therefore, he has to prove that he is better than other teammates, if he wants to play more. In this process the head coach has the power to decide, who is going to get more playing minutes. If this decision is perceived as unfair, athletes will have less trust in their team- mates and the vicious circle of distrust and lack of cohesion begins. Thus, from the aspect of within-team battle among athletes, trust in the head coach is a crucial characteristic of a successful team. 5.3 Limitations and suggestions The use of subjective data, which were collected on individuals’ self-reports is usually per- ceived as a limitation, as it raises concerns about common method bias. However, in par- ticular case of trust, cohesion and perception of HRM quality measurement we couldn’t avoid that, and, moreover, the analysis eliminated the common method bias problem in particular study. On the other hand, many authors (e.g. Wright & Boswell, 2002; Alves et al., 2013) argued that self-report measures are actually the most valid measurement method for examination of HRM effects, since the intended HRM is usually different from implemented, and the individuals are best placed to report their own perception of HRM quality, their degree of trust and the perception of team cohesion. Secondly, our data were collected at only one point of time, which might limit the conclusions regarding the causal order in examined relationships. Thus, it might, for example, be also possible that athletes’ trust in head coach leads to better perception of HRM. Finally, data were collected only among basketball clubs in four countries with similar historical background, which may hamper the generalization of results. In line with limitations stated above, we recommend further research on sport clubs over longer period of time, in different environments and from different sport branches. 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Way of leaving the club 4.0 1.71 .19 .34 .20 .10* .18 .10* .16 .37 .37 All correlation coefficients are significant at the level of .01 except * APPENDIX 2 Means, SD, correlation coefficients and AVE for subsample A (N = 277) Variables M SD 1 2 3 4 5 1. Perceived HRM quality 4.44 1.12 AVE = .64 2. Trust among athletes 5.56 0.87 .43** AVE = .82 3. Trust in head coach 5.79 1.08 .51** .51** AVE = .81 4. Perceived cohesiveness 4.85 1.03 .29** .44** .43** AVE = .71 5. Seasons in team 4.40 4.52 -.02 .06 .10 .12 6. Seasons with current head coach 2.20 2.43 .21 .06 .15* .12 .37** ** P < .01 * P < .05 I. IVAŠKOVIĆ | THE EFFECT OF HRM QUALITY ON TRUST AND TEAM COHESION... 365 APPENDIX 3 Means, SD, correlation coefficients and AVE for subsample B (N = 282) Variables M SD 1 2 3 4 5 1. Perceived HRM quality 4.43 1.27 AVE = .55 2. Trust among athletes 5.52 0.81 .41** AVE = .80 3. Trust in head coach 5.77 1.03 .45** .50** AVE = .82 4. Perceived cohesiveness 4.66 1.01 .18** .37** .36** AVE = .62 5. Seasons in team 5.04 4.44 -.19** .08 .09 .01 6. Seasons with current head coach 2.66 2.34 -.02 -.04 .00 -.10 .50** ** P < .01 * P < .05