Determinants and effects of formal target agreements: An empirical investigation of German firms

We investigate organizational determinants and performance effects of formal target agreements for employees based on the IAB establishment panel, a representative panel of German establishments. The results show that establishments with a high employee turnover rate, a large proportion of temporary...

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Bibliographic Details
Published in:Review of managerial science 2017, Vol.11 (1), p.1-18
Main Authors: Kampkötter, Patrick, Marggraf, Kathrin, Zimmermann, Jan-Hendrik
Format: Article
Language:English
Subjects:
Accounting/Auditing
Agreements
Arbeitsbeziehung
Arbeitsleistung
Arbeitsorganisation
Auswirkung
Banking
Betrieb
Betriebsgröße
Betriebsrat
Betriebszugehörigkeit
Business and Management
Business Strategy/Leadership
Datasets
Determinante
Employees
Goal setting
Human resource management
Hypotheses
IAB-Betriebspanel
Institut für Arbeitsmarkt- und Berufsforschung
International
Management by objectives
Management science
Marketing
Original Paper
Panel
Personalbestand
Personalmanagement
Qualifikation
Qualifikationsstruktur
Studies
Supervisors
Tenure
Unternehmenserfolg
Unternehmenskultur
Workforce
Works councils
Zielvereinbarung
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Summary:We investigate organizational determinants and performance effects of formal target agreements for employees based on the IAB establishment panel, a representative panel of German establishments. The results show that establishments with a high employee turnover rate, a large proportion of temporary workers, and a highly qualified workforce are significantly more likely to implement target agreements. Also, establishments with works councils installed are more likely to do so, controlling, among others, for firm size. Concerning organizational performance, we apply a first-difference and a fixed effects approach and find that establishments that implement target agreements achieve around 5 % higher total sales compared to firms that did not introduce this practice. Hence, organizations seem to benefit from the implementation of formal target agreements for employees.
ISSN:1863-6683
1863-6691
1863-6691
DOI:10.1007/s11846-015-0177-5