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

TitleVariable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany
Publication TypeJournal Article
Year of Publication2014
AuthorsHeywood, John S., and Jirjahn, Uwe
JournalBritish Journal of Industrial Relations
Volume52
Pagination521 - 552
Keywordsdomestic ownership, employee ownership, foreign ownership, Germany, industrial relations, performance appraisal, profit-sharing, variable pay
Abstract

We use a representative sample of German establishments to show that those with foreign ownership are more likely to use performance appraisal, profit-sharing and employee share ownership than those with domestic ownership. Moreover, we show that works councils are associated with an increased probability of using each of the three practices when under domestic ownership but not when under foreign ownership. These results inform the ongoing debate over institutional duality, the extent to which foreign firms adopt uniform practices independent of local institutions, and the extent to which they adapt and participate in those local institutions.