Payment Schemes, Returns and Works Councils

The interdependences of payment schemes, returns and the existence of a works council are analysed by using data collected on German firms in the sector of mechanical engineering. There is no connection between payment schemes and returns, whereas a works council has a negative effect on a firm's returns as has been found in former studies. Although a strong correlation between the use of different payment schemes and works councils exists, this in only due to firm size. Finally, a first model of the determinants of newly-founded works councils is estimated, validating the former results and suggesting a new direction for further research