What does democratic management do in Chinese workplaces? Evidence from matched employer–employee data

Abstract

Democratic management (DM) is an important set of statutory employee participation institutions that goes beyond trade unions in Chinese workplaces; however, its effects on pay and performance are unstudied. Using data from the China Employer-Employee Matched Survey, this study examines how DM is associated with pay and performance levels in China. The study finds that DM is positively associated with workers' hourly wages, fringe benefits, and firms' labour productivity on average, suggesting that it is not merely 'window-dressing' as perceived by conventional wisdom. This study also reveals that workplace transparency mediates the relationship between DM and employees' earnings, while the industrial relations climate mediates the relationship between DM and firms' productivity.

Creating a safer workplace: A linkage model for labour‒management partnership, psychological safety, collaborative industrial relations climate and organisational occupational and health safety performance

“…The nature of these arrangements is input democracy (consultation) rather than output democracy (joint decision-making) (Huang, 2022). Recent studies have reported the effectiveness of China's democratic management (Chen et al, 2022; Huang et al, 2016; Jing et al, 2022; Long et al, 2021). This is in contrast to earlier research on democratic management under Mao's regime and the democratising workplace reform of the 1980s.…”