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Measuring the Indirect Effects of Adverse Employer Behaviour on Worker Productivity: a field Experiment

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  • Matthias Heinz
  • Sabrina Jeworrek
  • Vanessa Mertins
  • Heiner SchumacherKU Leuven
  • Matthias Sutter

Abstract

We conduct a field experiment to study how worker productivity is affected if employers act adversely towards their co-workers. Our employees work for two shifts in a call centre. In our main treatment, we lay off some workers before the second shift. Compared to two control treatments, we find that the lay-off reduces the productivity of unaffected workers by 12%. We find suggestive evidence that this result is not driven by altered beliefs about the job or the management’s competence, but caused by the workers’ perception of unfair employer behaviour. The latter interpretation is confirmed in a prediction experiment with professional HR managers. Our results suggest that the price for adverse employer behaviour goes well beyond the potential tit for tat of directly affected workers.

Suggested Citation

  • Matthias Heinz & Sabrina Jeworrek & Vanessa Mertins & Heiner SchumacherKU Leuven & Matthias Sutter, 2020. "Measuring the Indirect Effects of Adverse Employer Behaviour on Worker Productivity: a field Experiment," The Economic Journal, Royal Economic Society, vol. 130(632), pages 2546-2568.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:632:p:2546-2568.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa038
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    Citations

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    Cited by:

    1. Sabrina Jeworrek & Joschka Waibel, 2021. "Unethical employee behavior against coworkers following unkind management treatment: An experimental analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1220-1234, July.
    2. Kerstin Grosch & Holger A. Rau, 2020. "Procedural Unfair Wage Differentials And Their Effects On Unethical Behavior," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1689-1706, October.
    3. Sule Alan & Gozde Corekcioglu & Matthias Sutter, 2023. "Improving Workplace Climate in Large Corporations: A Clustered Randomized Intervention," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 151-203.
    4. Jirjahn, Uwe & Mohrenweiser, Jens, 2023. "Variable Payment Schemes and Productivity: Do Individual-Based Schemes Really Have a Stronger Influence than Collective Ones?," IZA Discussion Papers 16267, Institute of Labor Economics (IZA).
    5. Natália P. Monteiro & Odd Rune Straume, 2024. "Management Practices, Pay, and Pay Inequality," Journal of Labor Research, Springer, vol. 45(2), pages 254-304, June.
    6. Akerlof, Robert & Ashraf, Anik & Macchiavello, Rocco & Rabbani, Atonu, 2020. "Layoffs and productivity at a Bangladeshi sweater factor," The Warwick Economics Research Paper Series (TWERPS) 1293, University of Warwick, Department of Economics.
    7. Sule Alan & Gozde Corekcioglu & Mustafa Kaba & Matthias Sutter, 2023. "Female Leadership and Workplace Climate," ECONtribute Policy Brief Series 057, University of Bonn and University of Cologne, Germany.
    8. Andrea Bassanini & Eve Caroli & Kevin Geay & Antoine Reberioux, 2024. "Heavy is the crown: CEOs’ social interactions and layoff decisions," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(5), pages 1253-1270.
    9. Nisvan Erkal & Steven Y. Wu & Brian E. Roe, 2022. "Putting relational contract theory to the test: experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 111-139, February.
    10. Adrian Chadi & Mario Mechtel & Vanessa Mertins, 2022. "Smartphone bans and workplace performance," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 287-317, February.
    11. Rudolf Kerschbamer & Regine Oexl, 2023. "The effect of random shocks on reciprocal behavior in dynamic principal-agent settings," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 468-488, April.
    12. Andrea Bassanini & Eve Caroli & Bruno Chaves Ferreira & Antoine Reberioux, 2020. "Don’t Downsize This! Social Reactions to Mass Dismissals on Twitter," Post-Print halshs-03012930, HAL.
    13. Jeworrek, Sabrina & Leisen, Bernd Josef & Mertins, Vanessa, 2021. "Gift-exchange in society and the social integration of refugees–Evidence from a survey, a laboratory, and a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 482-499.

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