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Trust and workplace performance

Author

Listed:
  • John T. Addison
  • Paulino Teixeira

Abstract

This paper explores the relationship between trust and establishment performance. The outcome indicators are management’s assessment of the economic or financial situation of the workplace and its relative labor productivity. Trust is initially measured using the individual survey respondent’s assessment of the ‘contribution’ of the other side, the rating of the employee representative being favored over that of management as less subject to feedback from performance. Although the potential endogeneity of employee trust is taken into account, an improved measure is constructed from the discrepancy or dissonance between the assessments of the two sides as to the quality of industrial relations at the workplace. All trust measures are associated with improved establishment performance. However, there is no suggestion from specifications using the two more favored trust measures that any one type of formal workplace representation – either works councils or union bodies – is superior. Dissonance, if indeed exogenous, demonstrates that good industrial relations trump type of workplace representation.

Suggested Citation

  • John T. Addison & Paulino Teixeira, 2019. "Trust and workplace performance," CESifo Working Paper Series 7572, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_7572
    as

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    File URL: https://www.cesifo-group.de/DocDL/cesifo1_wp7572.pdf
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    References listed on IDEAS

    as
    1. Gilbert Cette & Nicolas Dromel & Rémy Lecat, 2013. "Labour Relations Quality and Productivity: An Empirical Analysis on French Firms," Review of Economics and Institutions, Università di Perugia, vol. 4(2).
    2. Sarah Brown & Jolian McHardy & Robert McNabb & Karl Taylor, 2011. "Workplace Performance, Worker Commitment, and Loyalty," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 925-955, September.
    3. Stephen J. Deery & Roderick D. Iverson, 2005. "Labor-Management Cooperation: Antecedents and Impact on Organizational Performance," ILR Review, Cornell University, ILR School, vol. 58(4), pages 588-609, July.
    4. Brown, Sarah & Gray, Daniel & McHardy, Jolian & Taylor, Karl, 2015. "Employee trust and workplace performance," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 361-378.
    5. Roodman, David, 2011. "Fitting fully observed recursive mixed-process models with cmp," Stata Journal, StataCorp LP, vol. 11(2), pages 1-48.
    6. repec:hal:journl:hal-00975238 is not listed on IDEAS
    7. Morris M. Kleiner & Jonathan S. Leonard & Adam M. Pilarski, 2002. "How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing," ILR Review, Cornell University, ILR School, vol. 55(2), pages 195-218, January.
    8. Philippe Aghion & Yann Algan & Pierre Cahuc, 2011. "Civil Society And The State: The Interplay Between Cooperation And Minimum Wage Regulation," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 3-42, February.
    9. Olivier Blanchard & Thomas Philippon, 2004. "The Quality of Labor Relations and Unemployment," NBER Working Papers 10590, National Bureau of Economic Research, Inc.
    10. Gilbert Cette & Nicolas Dromel & Rémy Lecat & Anne-Charlotte Paret, 2013. "Labour Relations Quality and Productivity: an Empirical Analysis on French Firms," Post-Print hal-01502777, HAL.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    trust; dissonance; workplace employee representation; economic; financial performance; labor productivity;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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