Trust in direct leadership plays a central role in shaping employee experience, engagement, and performance within organisations. Despite extensive empirical attention, research has predominantly conceptualised trust as a reciprocal response to leader behaviour, limiting understanding of how trust judgments form in everyday workplace interactions. This paper advances a microfoundational model that reconceptualises trust as a cognitively mediated and socially embedded evaluation arising from the interaction of leader behaviour, employee interpretation, identity processes, and organisational context.

Drawing on a systematic review of 105 empirical studies, the paper identifies a dominant behavioural response paradigm in which leadership styles position trust as the mechanism linking leader actions to employee outcomes. While this perspective has generated consistent findings, it provides limited insight into the interpretive processes through which employees evaluate leaders. The proposed model addresses this limitation by specifying how employees actively interpret leader behaviour through cognitive schemas, expectations, and heuristics, rather than responding directly to behaviour.

The model advances four propositions. First, leader behaviour influences trust through how employees interpret that behaviour. Second, alignment between employee and leader identities shapes how behaviour is interpreted and evaluated. Third, organisational context influences both leader behaviour and how it is interpreted. Fourth, trust acts as a linking mechanism between interpreted leader behaviour and employee outcomes. Together, these propositions position trust as an emergent judgment formed through dynamic, contextually embedded processes.

This reconceptualisation has direct implications for thriving people and workplaces. It shifts attention from prescribing ideal leader behaviours to understanding how those behaviours are perceived, interpreted, and experienced by employees. This is particularly relevant in diverse and complex work environments, where the same leader behaviour may be interpreted differently across individuals and contexts. By recognising trust as an interpretive process, organisations can better design leadership development, communication practices, and organisational systems that support consistent, fair, and contextually aligned interpretations.

Practically, the model highlights that improving workplace wellbeing and performance requires more than changing what leaders do. It requires attention to how meaning is constructed within relationships, including aligning leader actions with employee expectations, reducing ambiguity in organisational contexts, and supporting identity congruence within teams. In doing so, the model provides a more precise and actionable framework for strengthening trust, improving relational quality, and enabling employees to thrive at work.