Human resources management in German firms is rooted in the country’s highly structured education and apprentice-training system. Tracking begins at age 10, when a small percentage of the most academically talented students (most of whom do not come from working-class families) enter a college preparatory program and go on to obtain university degrees and jobs in their chosen professions. About 70 percent of German students are tracked into a vocational education and training system. At age 15 those in the vocational track begin a three-year apprenticeship program that splits their time between classroom instruction and on-the-job training in German companies. Upon completion of this apprenticeship they are certified in their trade. Further occupational mobility at later stages of a worker’s career depends in large part on receiving additional training and professional certification. This system provides general training that is transferable to other enterprises, making it possible for workers to move from one firm to another.

The high degree of skill training combined with a strong work ethic reduces the need for close supervision. Studies have shown that German firms tend to have fewer supervisors than are typically found in comparable concerns elsewhere in Europe or in America. Finally, the heavy role that business enterprises play in the training and socialization of their workers helps explain why surveys have found German workers to be deeply committed to their jobs and to exhibit strong allegiance to their organizations.

Together, comparisons of the American, Japanese, and German models illustrate that, while institutions are consistent with each country’s unique cultural, economic, and political environments, all industrial relations systems ultimately face the same fundamental issues. They all must devise policies and institutions that can meet workers’ expectations and enhance productivity. Industrial relations systems must also provide employees with a means of expressing their needs at the workplace while offering steps for resolving the conflicts that inevitably arise between workers and employers. How well an industrial relations system performs these functions has a major effect on the welfare of individual workers, their employers, and the society in which they live.

Important works in the field of industrial relations include Sidney Webb and Beatrice Webb, Industrial Democracy, 2 vol. (1897, reprinted in 1 vol., 1965), a classic theory in the British socialist tradition; John R. Commons, Institutional Economics: Its Place in Political Economy (1934, reprinted in 2 vol., 1990), a summary of theoretical ideas by the father of American industrial relations research; John T. Dunlop, Industrial Relations Systems, rev. ed. (1993), a theoretical model that shaped the study of industrial relations between 1960 and 1980; Jack Barbash, The Elements of Industrial Relations (1984), a modern statement on the nature of the employment relationship; Richard Hyman, Industrial Relations: A Marxist Introduction (1975), an interpretation by a Marxist; Thomas A. Kochan, Harry C. Katz, and Robert B. McKersie, The Transformation of American Industrial Relations (1986, reissued 1994), a study offering a strategic-choice model for interpretation of industrial relations; James N. Baron and David M. Kreps, Strategic Human Resources (1999), a sociological and economic approach to understanding employment relations; and Richard E. Walton and Robert B. McKersie, A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System, 2nd ed. (1991), a classic theory of the dynamics of negotiations. Taishiro Shirai (ed.), Contemporary Industrial Relations in Japan (1983), is a survey of the evolution of Japanese industrial relations from World War II to the end of the 1970s; and Wolfgang Streeck, Industrial Relations in West Germany: A Case Study of the Car Industry (1984), is an in-depth look at the German industrial system.

Leading works in the area of organizational behaviour include Chester I. Barnard, The Functions of the Executive (1938, reissued 1979), a classic statement on the nature of organizational relations by a prominent executive of his time; Michel Crozier, The Bureaucratic Phenomenon (1964, reissued 1967; originally published in French, 1964), an insightful study of organizational behaviour in France; James G. March, Herbert A. Simon, and Harold Guetzkow, Organizations, 2nd ed. (1993), a theoretical analysis based on a decision-making approach; Douglas McGregor, The Human Side of Enterprise, annotated ed. (2006), a study of two contrasting sets of assumptions managers make toward employees’ motivations and of the effects of these assumptions on managerial behaviour; Industrial Democracy in Europe Revisited (1993), a comparative empirical study of worker participation conducted by an interdisciplinary team of researchers from 12 European countries; and Michael J. Piore and Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity (1984), a discussion of the changes in work organization and relations in response to changing technologies and market conditions. A study of the changing work force is Haruo Shimada, Japan’s “Guest Workers”: Issues and Public Policies, trans. from Japanese by Roger Northridge (1994; originally published in Japanese, 1993), which examines the implications of immigrant labour in Japan.