VARIABLE PAY, INDUSTRIAL RELATIONS AND COLLECTIVE BARGAINING

Pay determination has been characterized by two major industrial relations trends during the last decades: decentralization of bargaining and a shift to variable pay systems (VPS) under which pay is related to the quality or quantity of work performed. These two trends are commonly seen as twin processes in that effective use of VPS require decentralized pay determination, namely the (re)integration of decisions on pay into the realm of the company. The spread of VPS is linked to the rise of "modern" human resource management which tends to see itself as an alternative to conventional personnel management and its association with collective bargaining Hence, it threatens to unleash not only decentralization but also deregulation of collective pay determination. Despite this challenge the spread of VPS has not resulted in a general decay of the coverage of collective bargaining across countries. This directs attention to how collective bargaining interacts with VPS. Given the considerable differences in the national bargaining systems, the key hypothesis of this project is that these systems differ in their ability to regulate the introduction and use of VPS on collective bargaining, and that impact of VPS on collective bargaining differs with the properties of the national bargaining systems as well. This project thus deals with a problem of European relevance: on the one hand, collective bargaining is widely considered a component of the "European Social Model"; on the other, variable pay has become part of broader efforts to enhance Europe`s competitiveness. This raises the question of how demands for industrial democracy can be reconciled with demands for economic performance. While there are still notable differences in the bargaining institutions across countries, the rise of VPS and bargaining decentralization are transnational trends. This means that a crossnationally comparative research design is most appropriate when it comes to analyzing the interaction of VPS and collective bargaining. This project adopts such a design, by systematically comparing Austria, Norway and the United Kingdom. From an analytical perspective, these countries are especially interesting because their bargaining systems differ significantly.

Pay determination has been characterized by two major industrial relations trends during the last decades: decentralization of bargaining and a shift to variable pay systems (VPS) under which pay is related to the quality or quantity of work performed. These two trends are commonly seen as twin processes in that effective use of VPS require decentralized pay determination, namely the (re)integration of decisions on pay into the realm of the company. The spread of VPS is linked to the rise of "modern" human resource management which tends to see itself as an alternative to conventional personnel management and its association with collective bargaining Hence, it threatens to unleash not only decentralization but also deregulation of collective pay determination. Despite this challenge the spread of VPS has not resulted in a general decay of the coverage of collective bargaining across countries. This directs attention to how collective bargaining interacts with VPS. Given the considerable differences in the national bargaining systems, the key hypothesis of this project is that these systems differ in their ability to regulate the introduction and use of VPS on collective bargaining, and that impact of VPS on collective bargaining differs with the properties of the national bargaining systems as well. This project thus deals with a problem of European relevance: on the one hand, collective bargaining is widely considered a component of the "European Social Model"; on the other, variable pay has become part of broader efforts to enhance Europe`s competitiveness. This raises the question of how demands for industrial democracy can be reconciled with demands for economic performance. While there are still notable differences in the bargaining institutions across countries, the rise of VPS and bargaining decentralization are transnational trends. This means that a crossnationally comparative research design is most appropriate when it comes to analyzing the interaction of VPS and collective bargaining. This project adopts such a design, by systematically comparing Austria, Norway and the United Kingdom. From an analytical perspective, these countries are especially interesting because their bargaining systems differ significantly.