The current study deals with the question of whether affective trust among the teaching staff and teacher participation in decision-making (PDM) might influence the relationship between principals' skills (cognitive and interpersonal) and organizational outcomes (job satisfaction and teacher absenteeism) during the first year of educational reform implementation. The research model was further compared with schools that did not undergo the reform. Participants included 1370 teachers and 106 principals from 106 randomly selected elementary schools in Israel that implemented the "New Horizon" reform; and 1203 teachers from 101 schools which did not implement the reform. Results indicated that in the first year of reform implementation, only principals' cognitive skills lead to PDM and affective trust among the teaching staff, the latter being positively related to teachers' job satisfaction, which in turn is negatively related to teachers' absenteeism during this year. Furthermore, affective trust and job satisfaction mediated the relationship between principals' cognitive skills and teacher absenteeism in the first year of reform implementation. Regarding the differences between the two groups of schools, the model of schools with no reform implementation showed only a relationship between cognitive skills and PDM. The theoretical and practical implications of the study are discussed.