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Reassessing the Impact of High Performance Workplaces


  • Zwick, Thomas
  • Wolf, Elke


High performance workplace practices were extolled as an efficient means to increase firm productivity. The empirical evidence is disputed, however. To assess the productivity effects of a broad variety of measures, we simultaneously account for both unobserved heterogeneity and endogeneity using establishment panel data for Germany. We show that increasing employee participation enhances firm productivity in Germany, whereas incentive systems do not foster productivity. Our results further indicate that firms with structural productivity problems tend to introduce organisational changes that increase employee participation whereas well performing firms are more likely to offer incentives.

Suggested Citation

  • Zwick, Thomas & Wolf, Elke, 2002. "Reassessing the Impact of High Performance Workplaces," ZEW Discussion Papers 02-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:890

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    10. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    11. Martin Conyon & Richard B. Freeman, 2004. "Shared Modes of Compensation and Firm Performance U.K. Evidence," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 109-146 National Bureau of Economic Research, Inc.
    12. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    13. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    14. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    15. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    16. Ernst Fehr & Simon Gaechter, "undated". "Do Incentive Contracts Crowd out Voluntary Cooperation?," IEW - Working Papers 034, Institute for Empirical Research in Economics - University of Zurich.
    17. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1449-1492.
    18. Douglas L. Kruse, 1993. "Profit Sharing: Does It Make a Difference?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ps, November.
    19. John Addison & Stanley Siebert & Joachim Wagner & Xiangdong Wei, 2000. "Worker Participation and Firm Performance: Evidence from Germany and Britain," British Journal of Industrial Relations, London School of Economics, vol. 38(1), pages 7-48, March.
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    Cited by:

    1. John Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2008. "The Demand for Labor: An Analysis Using Matched Employer–Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," Journal of Labor Research, Springer, vol. 29(2), pages 114-137, June.
    2. Grip,Andries,de & Sieben,Inge, 2004. "The Effects of Human Resource Management on Workers' Wages and Firm Productivity," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    3. Arvanitis, Spyros & Loukis, Euripidis N., 2009. "Information and communication technologies, human capital, workplace organization and labour productivity: A comparative study based on firm-level data for Greece and Switzerland," Information Economics and Policy, Elsevier, vol. 21(1), pages 43-61, February.
    4. Hempell, Thomas, 2002. "What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level," ZEW Discussion Papers 02-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Lutz, Roman, 2005. "Produktivitätseffekte betrieblicher Zusatzleistungen (Productivity effects of employee benefits)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(1), pages 30-48.
    6. Kirchner, Stefan & Oppen, Maria & Bellmann, Lutz, 2008. "Zur gesellschaftlichen Einbettung von Organisationswandel : Einführungsdynamik dezentraler Organisationsstrukturen," IAB Discussion Paper 200837, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Andries de Grip & Inge Sieben, 2005. "The effects of human resource management on small firms' productivity and employees' wages," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1047-1054.
    8. Addison, John T. & Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2003. "German Works Councils in the Production Process," IZA Discussion Papers 812, Institute for the Study of Labor (IZA).
    9. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, June.
    10. repec:iab:iabzaf:v:38:i:1:p:30-48 is not listed on IDEAS
    11. Addison, John T., 2005. "The Determinants of Firm Performance: Unions, Works Councils, and Employee Involvement/High Performance Work Practices," IZA Discussion Papers 1620, Institute for the Study of Labor (IZA).
    12. Bellmann, Lutz & Caliendo, Marco & Hujer, Reinhard & Radic, Dubravko, 2002. "Beschäftigungswirkungen technisch-organisatorischen Wandels : eine mikroökonometrische Analyse mit dem Linked IAB-Panel (Technological and organisational change and its effects on employment : a micro," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(4), pages 506-522.
    13. Wolf, Elke & Beblo, Miriam, 2004. "Does Work Time Flexibility Work? An Empirical Assessment of the Efficiency Effects for German Firms," ZEW Discussion Papers 04-47, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    14. Michael Beckmann & Istvàn Hegedüs, 2011. "Trust-Based Working Time and Organizational Performance: Evidence from German Establishment-Level Panel Data," Working papers 2011/13, Faculty of Business and Economics - University of Basel.
    15. Wolf, Elke & Heinze, Anja, 2007. "How to Limit Discrimination? Analyzing the Effects of Innovative Workplace Practices on Intra-Firm Gender Wage Gaps Using Linked Employer-Employee Data," ZEW Discussion Papers 07-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Spyros Arvanitis, 2005. "Computerization, workplace organization, skilled labour and firm productivity: Evidence for the Swiss business sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 225-249.
    17. repec:iab:iabmit:v:35:i:4:p:506-522 is not listed on IDEAS

    More about this item


    high performance workplaces; microeconometric evaluation; firm productivity; panel regression;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights


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