We study the link between performance pay and alcohol use in Germany, a country with mandated health insurance. Previous research from the US argues that alcohol use as a form of "self-medication" may be a natural response to the stress and uncertainty of performance pay when many workers do not...

Using panel data from German establishments, this study finds that performance pay is associated with increased productivity only when it is coupled with a high-wage policy. This holds for individual-based performance pay, group-based performance pay and profit sharing.

A growing number of econometric examinations show that works councils substantially shape the personnel policy of firms in Germany. Firms with works councils make greater use of various HRM practices. This gives rise to the question of whether employers view the shaping of personnel policy...