The adjustments were made possible by two major changes in employment practices. The first was the use of variable bonuses, which have grown both as a percentage of pay and in terms of the number of employees receiving them. The British annual earnings survey shows that the cut in wages was due to reduced bonuses. The second was the increased use of agency and temporary workers. In the 1970s and the 1980s, such radical adjustments would have required tough negotiations with no certainty of success.
Today, the relevant negotiations take place long before the adjustments are made. For variable pay, bonus systems are often set up as part of the collective pay agreement or they are a regular part of the organisation’s reward system. For temporary workers, the agreement takes place when the employee is hired, and for agency personnel, the pact is between the company and the temporary work agency. Perhaps the most significant change has been in the timing and location of negotiations. It has been relocated from the point at which unions in the past might have gained greatest bargaining leverage. Click here to read more...
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