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Does profit sharing reduce conflict with the boss? Evidence from Germany

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  • John Heywood
  • Uwe Jirjahn
  • Georgi Tsertsvadze

Abstract

This paper argues that, in general, profit sharing aligns the interests of workers and the firm and that this alignment reduces the extent of conflict between workers and management. This paper also argues that this general result will not carry over to the workers least able to respond to the alignment of interests with greater effort and that it will not apply to supervisors. After describing the German use of profit sharing, we use German data to show that for non-supervisory workers in excellent health, profit sharing reduces conflict but that for those who are not in excellent health and for supervisors, profit sharing does not reduce conflict. We also show that independent from profit sharing, conflict with the boss is greater for the aged and for those not in excellent health.

Suggested Citation

  • John Heywood & Uwe Jirjahn & Georgi Tsertsvadze, 2005. "Does profit sharing reduce conflict with the boss? Evidence from Germany," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 235-250.
    • Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:235-250
    DOI: 10.1080/10168730500080741
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    References listed on IDEAS

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    1. Heywood, John S & Hubler, Olaf & Jirjahn, Uwe, 1998. "Variable Payment Schemes and Industrial Relations: Evidence from Germany," Kyklos, Wiley Blackwell, vol. 51(2), pages 237-257.
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    6. John S. Heywood & Uwe Jirjahn & Georgi Tsertsvadze, 2005. "Getting along with Colleagues – Does Profit Sharing Help or Hurt?," Kyklos, Wiley Blackwell, vol. 58(4), pages 557-573, November.
    7. John S. Heywood & Uwe Jirjahn, 2002. "Payment Schemes and Gender in Germany," ILR Review, Cornell University, ILR School, vol. 56(1), pages 44-64, October.
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    12. Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-772, October.
    13. John S. Heywood & Olaf Hübler & Uwe Jirjahn, 1998. "Variable Payment Schemes and Industrial Relations: Evidence from Germany," Kyklos, Wiley Blackwell, vol. 51(2), pages 237-257, May.
    14. Douglas L. Kruse, 1993. "Profit Sharing: Does It Make a Difference?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ps, August.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. John S. Heywood & Uwe Jirjahn, 2014. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 521-552, September.
    2. Fathi Fakhfakh & Andrew Robinson & Aguibou Tall, 2019. "Financial Participation and Collective Conflicts: Evidence from French Firms," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 674-703, October.
    3. Colin P. Green & John S. Heywood, 2016. "Don't Forget the Gravy! Are Bonuses Just Added on Top of Salaries?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 490-513, July.
    4. Green, Colin P. & Heywood, John S., 2010. "Profit sharing and the quality of relations with the boss," Labour Economics, Elsevier, vol. 17(5), pages 859-867, October.
    5. C Green & J S Heywood, 2007. "Performance pay, sorting and the dimensions of job satisfaction," Working Papers 584041, Lancaster University Management School, Economics Department.
    6. Jirjahn Uwe & Tsertsvadze Georgi, 2006. "Betriebsräte und Arbeitszufriedenheit / Works Councils and Job Satisfaction," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 537-561, October.
    7. repec:lan:wpaper:2928 is not listed on IDEAS
    8. repec:lan:wpaper:3175 is not listed on IDEAS
    9. Colin Green & John S. Heywood, 2008. "Does Performance Pay Increase Job Satisfaction?," Economica, London School of Economics and Political Science, vol. 75(300), pages 710-728, November.
    10. repec:lan:wpaper:3020 is not listed on IDEAS

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