Demystifying the differences in the impact of training and incentives on employee performance: mediating roles of trust and knowledge sharing

Purpose This paper aims to investigate the differences in the mediating roles of trust and knowledge sharing (formal vs informal) in the process by which training and incentives influence organizational performance (sales increase and labor productivity). Design/methodology/approach The data from an online survey of Senior Managers from 119 firms in Hong Kong's clothing industry (HKCI) was analyzed using SmartPLS software. Findings Trust has a stronger mediating impact in the effects of incentives (vs training) on both formal and informal knowledge sharing. Informal (vs formal) knowledge sharing has a stronger mediating impact in the effects of trust on sales increase and labor productivity. Research limitations/implications Future research may consider different dimensions such as knowledge donating and collecting behaviors, as well as motives, such as self-enjoyment, reciprocity or social interaction ties to study knowledge sharing behavior. Practical implications This study shows that incentives are more likely than training to help build a trusting environment in an organization and that informal knowledge sharing has a stronger influence on organizational performance than formal knowledge sharing. Originality/value The study's distinctive contribution is the under-researched context of HKCI for investigating the mediating effects of trust and formal and informal knowledge sharing between ability and motivational practices on performance.