IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_7572.html
   My bibliography  Save this paper

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.
    • Handle: RePEc:ces:ceswps:_7572
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp7572.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    2. Werner Nienhueser & Heiko Hossfeld, 2011. "The Effects of Trust on the Preference for Decentralized Bargaining," SAGE Open, , vol. 1(3), pages 21582440114, October.
    3. Casey Ichniowski, 1986. "The Effects of Grievance Activity on Productivity," ILR Review, Cornell University, ILR School, vol. 40(1), pages 75-89, October.
    4. Bernd Brandl & Christian Lyhne Ibsen, 2017. "Instability and Change in Collective Bargaining: An Analysis of the Effects of Changing Institutional Structures," British Journal of Industrial Relations, London School of Economics, vol. 55(3), pages 527-550, September.
    5. 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).
    6. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52, National Bureau of Economic Research, Inc.
    7. Olivier Blanchard & Thomas Philippon, 2004. "The Quality of Labor Relations and Unemployment," NBER Working Papers 10590, National Bureau of Economic Research, Inc.
    8. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
    9. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    10. repec:hal:spmain:info:hdl:2441/33o86cn6qp83dot08iir97915s is not listed on IDEAS
    11. Addison John T. & Teixeira Paulino, 2019. "Workplace Employee Representation and Industrial Relations Performance: New Evidence from the 2013 European Company Survey," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 111-154, January.
    12. repec:bla:germec:v:10:y:2009:i::p:253-269 is not listed on IDEAS
    13. Addison John T. & Teixeira Paulino, 2009. "Are Good Industrial Relations Good for the Economy?," German Economic Review, De Gruyter, vol. 10(3), pages 253-269, August.
    14. Malcomson, James M, 1983. "Trade Unions and Economic Efficiency," Economic Journal, Royal Economic Society, vol. 93(369a), pages 51-65, Supplemen.
    15. 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).
    16. 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.
    17. Alan B. Krueger & Alexandre Mas, 2002. "Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Working Papers 840, Princeton University, Department of Economics, Industrial Relations Section..
    18. Grund Christian & Harbring Christine, 2013. "Trust and Control at the Workplace: Evidence from Representative Samples of Employees in Europe," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(5-6), pages 619-637, October.
    19. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    20. John T. Addison, 2009. "The Economics of Codetermination," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-10424-2, December.
    21. Alan B. Krueger & Alexandre Mas, 2004. "Strikes, Scabs, and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 253-289, April.
    22. 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.
    23. Addison John T. & Teixeira Paulino, 2019. "Workplace Employee Representation and Industrial Relations Performance: New Evidence from the 2013 European Company Survey," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 111-154, January.
    24. 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.
    25. 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.
    26. Harry C. Katz & Thomas A. Kochan & Kenneth R. Gobeille, 1983. "Industrial Relations Performance, Economic Performance, and QWL Programs: An Interplant Analysis," ILR Review, Cornell University, ILR School, vol. 37(1), pages 3-17, October.
    27. Alan B. Krueger & Alexandre Mas, 2002. "Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Working Papers 125, Princeton University, Department of Economics, Center for Economic Policy Studies..
    28. 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).
    29. 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.
    30. David Roodman, 2011. "Fitting fully observed recursive mixed-process models with cmp," Stata Journal, StataCorp LLC, vol. 11(2), pages 159-206, June.
    31. Joel Rogers & Wolfgang Streeck, 1995. "Works Councils: Consultation, Representation, and Cooperation in Industrial Relations," NBER Books, National Bureau of Economic Research, Inc, number roge95-1, June.
    32. repec:spo:wpmain:info:hdl:2441/33o86cn6qp83dot08iir97915s is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mohrenweiser, Jens, 2021. "Reconciling the opposing economic effects of works councils across databases [Die Vereinbarkeit gegensätzlicher Befunde zu ökonomischen Effekten von Betriebsräten in verschiedenen Datensätzen]," Industrielle Beziehungen. Zeitschrift für Arbeit, Organisation und Management, Verlag Barbara Budrich, vol. 28(4), pages 384-406.
    2. 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.
    3. John T. Addison & Paulino Teixeira & Lutz Bellmann, 2020. "Management Practices and Establishment Performance under Non-Union Workplace Representation," CESifo Working Paper Series 8599, CESifo.
    4. Mohrenweiser, Jens & Pfeifer, Christian, 2024. "Organisational justice, employee representation, and firm performance," GLO Discussion Paper Series 1499, Global Labor Organization (GLO).
    5. Gabriele Cardullo & Maurizio Conti & Andrea Ricci & Sergio Scicchitano & Giovanni Sulis, 2024. "On the emergence of cooperative industrial and labour relations," British Journal of Industrial Relations, London School of Economics, vol. 62(3), pages 568-590, September.
    6. 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.
    7. 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.
    8. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Addison, John T. & Teixeira, Paulino, 2019. "Strikes, employee workplace representation, unionism, and industrial relations quality in European establishments," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 109-133.
    2. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    3. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    4. Panos, Georgios & Theodossiou, Ioannis, 2009. "Union Mediation and Adaptation to Reciprocal Loyalty Arrangements," MPRA Paper 15471, University Library of Munich, Germany.
    5. Addison John T. & Teixeira Paulino, 2019. "Workplace Employee Representation and Industrial Relations Performance: New Evidence from the 2013 European Company Survey," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 111-154, January.
    6. Barry T. Hirsch, 2008. "Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 153-176, Winter.
    7. John T. Addison & Paulino Teixeira, 2006. "Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data," GEMF Working Papers 2006-02, GEMF, Faculty of Economics, University of Coimbra.
    8. 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.
    9. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    10. John T. Addison & Paulino Teixeira, 2024. "Worker commitment and establishment performance in Europe," Manchester School, University of Manchester, vol. 92(1), pages 40-66, January.
    11. Noda, Tomohiko, 2020. "Employee trust in management and mutual gains hypothesis in Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 55(C).
    12. Addison, John T. & Teixeira, Paulino, 2017. "Strikes, Employee Workplace Representation, Unionism, and Trust: Evidence from Cross-Country Data," IZA Discussion Papers 10575, Institute of Labor Economics (IZA).
    13. Thommes, Kirsten & Vyrastekova, Jana & Akkerman, Agnes, 2015. "Behavioral spillovers from freeriding in multilevel interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 78-87.
    14. Alan B. Krueger & Alexandre Mas, 2002. "Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Working Papers 125, Princeton University, Department of Economics, Center for Economic Policy Studies..
    15. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute of Labor Economics (IZA).
    16. Alan B. Krueger & Alexandre Mas, 2002. "Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Working Papers 840, Princeton University, Department of Economics, Industrial Relations Section..
    17. John T. Addison, 2005. "The Determinants Of Firm Performance: Unions, Works Councils, And Employee Involvement/High‐Performance Work Practices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    18. Shonchoy, Abu S. & Tsubota, Kenmei, 2015. "Economic impact of political protests (strikes) on manufacturing firms : evidence from Bangladesh," IDE Discussion Papers 523, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. Akerlof, Robert & Ashraf, Anik & Macchiavello, Rocco & Rabbani, Atonu, 2020. "Layoffs and productivity at a Bangladeshi sweater factory," CAGE Online Working Paper Series 499, Competitive Advantage in the Global Economy (CAGE).
    20. Jonathan Gruber & Samuel A. Kleiner, 2012. "Do Strikes Kill? Evidence from New York State," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 127-157, February.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_7572. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.