Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272583 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 15956
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
works councils
codetermination
performance appraisal
feedback interview
job satisfaction
linked employer-employee data
JEL: 
M5
J83
J28
Document Type: 
Working Paper

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