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Trust and workplace performance

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  • 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.
    • Handle: RePEc:ces:ceswps:_7572
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Marta Fana & Davide Villani, 2023. "Is it all the same? Types of innovation and their relationship with direct control, technical control and algorithmic management," European Journal of Industrial Relations, , vol. 29(4), pages 367-391, December.
    2. Mohrenweiser, Jens, 2021. "Reconciling the opposing economic effects of works councils across databases," GLO Discussion Paper Series 895, Global Labor Organization (GLO).
    3. Surhan Cam & Serap Palaz, 2023. "Mutual interests management with a purposive approach: Evidence from the Turkish shipyards for an amorphous impact model between (subjective) well‐being and performance," Industrial Relations Journal, Wiley Blackwell, vol. 54(1), pages 40-70, January.
    4. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    5. John T. Addison & Paulino Teixeira & Lutz Bellmann, 2020. "Management Practices and Establishment Performance under Non-Union Workplace Representation," CESifo Working Paper Series 8599, CESifo.
    6. John T. Addison & Paulino Teixeira & Philipp Grunau & Lutz Bellmann, 2023. "Works council ‘disaffection’ and establishment survivability," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(1), pages 38-67, February.

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    More about this item

    Keywords

    trust; dissonance; workplace employee representation; economic; financial performance; labor productivity;
    All these keywords.

    JEL classification:

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

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