Sectoral collective agreements: remuneration straitjackets for German workplaces?

Allen, Matthew, Tuselmann, Heinz, El-Said, Hamed and Windrum, Paul (2007) Sectoral collective agreements: remuneration straitjackets for German workplaces? Personnel review, 36 (6). pp. 963-977. ISSN 0048-3486

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Abstract

Purpose – This paper aims to map some of the diversity in employee relations in Germany that is overlooked, first, within assessments of the German labour market that focus on the national level and second, within separate studies in this area that emphasize attempts by employers to circumvent important institutions. Design/methodology/approach – The research adopts a quantitative approach to examine data for German manufacturing and service sectors on both the spread of industry-wide collective agreements and the extent to which workers are paid wage rates that are higher than those set out in those agreements. It also assesses the prevalence of profit sharing and employee share ownership schemes. Findings – Industry-wide collective agreements are not the burden that they are often portrayed. Actual wage rates and the prevalence of profit sharing and ESOSs make German workplaces more heterogeneous than critics and advocates of the German economic model posit. Research limitations/implications – The data are limited to Germany; however, Germany occupies a prominent position, not just within much of the employment relations literature, but also in terms of economic output. The research is also limited by an inability to provide evidence on workplaces that undercut sectoral collective agreements and to disaggregate the data further by sector and firm size/location. Originality/value – The paper provides a counterpoint to the portrayals of employee relations in Germany that often present a homogeneous picture of those relations. For the first time, data on the spread of profit sharing and employee share ownership schemes in German workplaces at the sectoral level are provided.