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Works Councils as Gatekeepers: Codetermination, Monitoring Practices, and Job Satisfaction

Author

Listed:
  • Grund, Christian

    (RWTH Aachen University)

  • Sliwka, Dirk

    (University of Cologne)

  • Titz, Krystina

    (RWTH Aachen University)

Abstract
This paper analyzes the role of works councils as gatekeepers safeguarding employee's interests in the adoption of monitoring practices. We first introduce a formal model predicting that (i) the introduction of monitoring practices leads to a stronger increase (or weaker decrease) in job satisfaction when a works council is in place, (ii) that this effect should be larger the lower the prior level of employee participation and (iii) that works councils increase the likelihood of the implementation of monitoring practices at the level of individual employees. We provide evidence in line with these hypotheses using linked-employer-employee panel data from Germany. We indeed find that the adoption of formal performance appraisals and feedback interviews is associated with a significantly larger increase in job satisfaction when there is a works council. This pattern is driven by establishments without collective bargaining agreements. The evidence also suggests that works councils indeed facilitate the implementation of monitoring practices, as codetermined firms have a higher likelihood that a practice implemented on the firm level is actually applied by middle management.

Suggested Citation

  • 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).
    • Handle: RePEc:iza:izadps:dp15956
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    References listed on IDEAS

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    1. Kathrin Manthei & Dirk Sliwka, 2019. "Multitasking and Subjective Performance Evaluations: Theory and Evidence from a Field Experiment in a Bank," Management Science, INFORMS, vol. 65(12), pages 5861-5883, December.
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    6. Lutz Bellmann & Olaf Hübler & Ute Leber, 2019. "Works council and training effects on satisfaction," Applied Economics Letters, Taylor & Francis Journals, vol. 26(14), pages 1177-1181, August.
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    8. Ricardo Pagan & Miguel Ángel Malo, 2021. "Performance Appraisal and Job Satisfaction for Workers Without and With Disabilities by Gender," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(3), pages 1011-1039, February.
    9. Chong Lau & Kuan Wong & Ian Eggleton, 2008. "Fairness of performance evaluation procedures and job satisfaction: The role of outcome‐based and non‐outcome‐based effects," Accounting and Business Research, Taylor & Francis Journals, vol. 38(2), pages 121-135.
    10. John T. Addison, 2009. "The Economics of Codetermination," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-10424-2, October.
    11. Peter Cappelli & Martin J. Conyon, 2018. "What Do Performance Appraisals Do?," ILR Review, Cornell University, ILR School, vol. 71(1), pages 88-116, January.
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    16. Frederiksen, Anders & Lange, Fabian & Kriechel, Ben, 2017. "Subjective performance evaluations and employee careers," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 408-429.
    17. Kraft Kornelius & Lang Julia, 2008. "The Causes and Consequences of Adopting a Works Council," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 512-532, October.
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    Cited by:

    1. Burdin, Gabriel & Dughera, Stefano & Landini, Fabio & Belloc, Filippo, 2023. "Contested Transparency: Digital Monitoring Technologies and Worker Voice," GLO Discussion Paper Series 1340, Global Labor Organization (GLO).

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    More about this item

    Keywords

    job satisfaction; feedback interview; performance appraisal; codetermination; works councils; linked employer-employee data;
    All these keywords.

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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