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

Christian Grund (), Dirk Sliwka () and Krystina Titz ()
Additional contact information
Christian Grund: RWTH Aachen University
Dirk Sliwka: University of Cologne
Krystina Titz: RWTH Aachen University

No 15956, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: job satisfaction; feedback interview; performance appraisal; codetermination; works councils; linked employer-employee data (search for similar items in EconPapers)
JEL-codes: J28 J83 M5 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-02
New Economics Papers: this item is included in nep-eur, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Labour Economics , 2024, 90, 102563

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