Building Trust and Loyalty in Innovative Organizations : A Dual-Theory Perspective

This study explores how an organizational innovative climate influences employee turnover intention, focusing on the mediating role of employee trust and the moderating effect of talent preference policies, specifically within manufacturing small and medium-sized enterprises (SMEs) in South Korea. Grounded in social exchange theory (SET) and the cognition–affect–conation (CAC) model, the study constructs a theoretical framework that links innovative climate, employee trust, and turnover intention. Using 6,838 valid observations from the nationally representative Human Capital Corporate Panel (HCCP), the study employs structural equation modeling (SEM) to test the hypothesized relationships. The results indicate that an innovative organizational climate significantly enhances employee trust, which in turn reduces turnover intention. Trust is found to partially mediate the relationship between innovative climate and turnover intention, while talent preference policies positively moderate the link between innovative climate and employee trust. These findings contribute to theoretical advancements in organizational behavior and human resource management and offer practical implications for SMEs aiming to strengthen employee trust and reduce turnover by cultivating innovation-friendly environments and implementing strategic talent policies.