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

Author

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  • Patrick Kampkötter

    (University of Cologne Seminar of Personnel Economics and Human Resource Management)

  • Kathrin Marggraf

    (University of Cologne Seminar of Personnel Economics and Human Resource Management)

  • Jan-Hendrik Zimmermann

    (University of Cologne Seminar of Personnel Economics and Human Resource Management)

Abstract

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.

Suggested Citation

  • Patrick Kampkötter & Kathrin Marggraf & Jan-Hendrik Zimmermann, 2017. "Determinants and effects of formal target agreements: an empirical investigation of German firms," Review of Managerial Science, Springer, vol. 11(1), pages 1-18, January.
    • Handle: RePEc:spr:rvmgts:v:11:y:2017:i:1:d:10.1007_s11846-015-0177-5
    DOI: 10.1007/s11846-015-0177-5
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    Cited by:

    1. Goo Hyeok Chung & Jongwook Pak, 2021. "Is there internal fit among ability-, motivation-, and opportunity-enhancing HR practices? Evidence from South Korea," Review of Managerial Science, Springer, vol. 15(7), pages 2049-2074, October.

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    More about this item

    Keywords

    Target agreements; Firm performance; Personnel economics; HR management; HR practices;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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