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Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany

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  • John S. Heywood
  • Uwe Jirjahn

Abstract

We estimate of the determinants of performance appraisal, profit sharing and employee share ownership schemes for a representative sample of German establishments. The results demonstrate that foreign owned establishments make more use of each of these HRM practices than domestically owned establishments. Moreover, the role of Germany's unique works councils varies critically by ownership. Among domestically owned establishments, works councils are associated with an increased probability of using each of the three practices but this does not hold true for foreign owned establishments. These results inform the on-going debate over the extent to which foreign firms adopt uniform practices independent of local institution and the extent to which they adapt and participate in those local institutions.

Suggested Citation

  • John S. Heywood & Uwe Jirjahn, 2011. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," Research Papers in Economics 2011-05, University of Trier, Department of Economics.
    • Handle: RePEc:trr:wpaper:201105
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    Cited by:

    1. Uwe JIRJAHN & Stephen C. SMITH, 2018. "Nonunion Employee Representation: Theory And The German Experience With Mandated Works Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 201-233, March.
    2. Jirjahn, Uwe, 2024. "Corporate Globalization and Worker Representation," IZA Discussion Papers 16727, Institute of Labor Economics (IZA).
    3. Uwe Jirjahn, 2021. "Foreign ownership and intra-firm union density in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 42(4), pages 1052-1079, November.
    4. 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.
    5. Uwe Jirjahn & Jens Mohrenweiser & Stephen C Smith, 2022. "Works councils and workplace health promotion in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(3), pages 1059-1094, August.
    6. Grund, Christian & Sliwka, Dirk & Titz, Krystina, 2023. "Works Councils as Gatekeepers: Codetermination, Monitoring Practices, and Job Satisfaction," IZA Discussion Papers 15956, Institute of Labor Economics (IZA).
    7. repec:bla:annpce:v:89:y:2018:i:1:p:201-233 is not listed on IDEAS
    8. Grund, Christian & Sliwka, Dirk & Titz, Krystina, 2019. "Works Councils and Performance Appraisals," IZA Discussion Papers 12670, Institute of Labor Economics (IZA).
    9. Jirjahn, Uwe, 2021. "Membership in Employers' Associations and Collective Bargaining Coverage in Germany," IZA Discussion Papers 14783, Institute of Labor Economics (IZA).
    10. Uwe Jirjahn, 2015. "Research on Trade Unions and Collective Bargaining in Germany: The Contribution of Labor Economics," Research Papers in Economics 2015-10, University of Trier, Department of Economics.
    11. Alberto Bayo-Moriones & Jose E. Galdon-Sanchez & Sara Martinez-de-Morentin, 2017. "Performance Measurement and Incentive Intensity," Journal of Labor Research, Springer, vol. 38(4), pages 496-546, December.
    12. Xulia González & Rosa Loveira & Consuelo Pazó, 2022. "Performance pay, firm size and export market participation: Evidence from matched employer–employee data," LABOUR, CEIS, vol. 36(3), pages 342-366, September.
    13. Heywood, John S. & Jirjahn, Uwe & Struewing, Cornelia, 2017. "Locus of control and performance appraisal," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 205-225.
    14. Uwe Jirjahn, 2016. "Works Councils and Employer Attitudes toward the Incentive Effects of HRM Practices," Research Papers in Economics 2016-07, University of Trier, Department of Economics.
    15. Burdin, Gabriel & Kato, Takao, 2021. "Complementarity in Employee Participation Systems: International Evidence," IZA Discussion Papers 14694, Institute of Labor Economics (IZA).
    16. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.
    17. Uwe Jirjahn, 2018. "The adoption and termination of profit sharing for employees: does management’s attitude play a role?," Applied Economics, Taylor & Francis Journals, vol. 50(2), pages 108-127, January.
    18. Verena Dill & Uwe Jirjahn, 2017. "Foreign owners and the quality of industrial relations in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 38(1), pages 5-25, February.
    19. Thomas Cornelissen & John Heywood & Uwe Jirjahn, 2014. "Reciprocity and Profit Sharing: Is There an Inverse U-shaped Relationship?," Journal of Labor Research, Springer, vol. 35(2), pages 205-225, June.
    20. Burdin, Gabriel & Kato, Takao, 2021. "Complementarity in Employee Participation Systems," GLO Discussion Paper Series 968, Global Labor Organization (GLO).
    21. Uwe Jirjahn, 2017. "Globalisierung und betriebliche Mitbestimmung," Research Papers in Economics 2017-05, University of Trier, Department of Economics.
    22. Uwe Jirjahn, 2023. "Membership in employers’ associations and collective bargaining coverage in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(3), pages 798-826, August.
    23. Tony Edwards & Rocío Sánchez-Mangas & Patrice Jalette & Jonathan Lavelle & Dana Minbaeva, 2016. "Global standardization or national differentiation of HRM practices in multinational companies? A comparison of multinationals in five countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(8), pages 997-1021, October.
    24. Verena Dill & Uwe Jirjahn, 2014. "Foreign Owners and Perceived Job Insecurity in Germany: Evidence from Linked Employer-Employee Data," Research Papers in Economics 2014-09, University of Trier, Department of Economics.
    25. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Foreign Owners; Works Councils; Performance Appraisal; Profit Sharing; Employee Share Ownership;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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