Works councils and the management of human resources: Evidence from German establishment data

This empirical research note focuses on the question of whether German works councils are sand or grease in the management of human resources and if the effects differ between three different works council-management relationship types. For this purpose, the author uses survey data from more than 11,000 German firms. The main result is that the effects of works councils on expected HRM (human resource management) problems in German firms are heterogeneous with respect to different aspects of HRM and to differences in works council-management relations. The findings are consistent with rent-protection, rent-sharing and voice functions of works councils.