Wage flexibility
February 2009
Comparative study [ 
size 327 kb ]
Increased competition has created pressure for flexibility or variation concerning wages. This can involve the localisation of basic pay-setting, which may or may not be governed by multi-employer bargaining arrangements, and the development of new variable payments systems (VPS) linked to measures of performance. This study reviews both sets of developments, focusing on two economic sectors – manufacturing and banking. It finds only limited use of ‘downwards’ wage flexibility but evidence of an increasing decentralisation of wage-setting through supplementary bargaining and the introduction of VPS which, especially in banking, are often at the employer’s discretion. Both developments threaten to erode the traditional regulatory function of multi-employer bargaining in particular.
The study was compiled on the basis of individual national reports submitted by the EIRO correspondents. The text of each of these national reports is available below. The reports have not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The national reports were drawn up in response to a questionnaire and should be read in conjunction with it.
Useful? Interesting? Tell us what you think.