Trust and Workplace Performance

41 Pages Posted: 5 Apr 2019

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Paulino Teixeira

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: 2019


This paper explores the relationship between trust and establishment performance. The outcome indicators are management’s assessment of the economic or financial situation of the workplace and its relative labor productivity. Trust is initially measured using the individual survey respondent’s assessment of the ‘contribution’ of the other side, the rating of the employee representative being favored over that of management as less subject to feedback from performance. Although the potential endogeneity of employee trust is taken into account, an improved measure is constructed from the discrepancy or dissonance between the assessments of the two sides as to the quality of industrial relations at the workplace. All trust measures are associated with improved establishment performance. However, there is no suggestion from specifications using the two more favored trust measures that any one type of formal workplace representation – either works councils or union bodies – is superior. Dissonance, if indeed exogenous, demonstrates that good industrial relations trump type of workplace representation.

Keywords: trust, dissonance, workplace employee representation, economic/financial performance, labor productivity

JEL Classification: J500

Suggested Citation

Addison, John T. and Teixeira, Paulino, Trust and Workplace Performance (2019). CESifo Working Paper No. 7572. Available at SSRN:

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
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Columbia, SC 29208
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

Paulino Teixeira

affiliation not provided to SSRN

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