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Variable Pay and Collective Bargaining in British Retail Banking

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  • James Arrowsmith
  • Paul Marginson

Abstract

The growth of variable pay schemes (VPS) appears to threaten collective approaches to pay determination, which are based on standardization and centralization. This article utilizes case study research to analyse the still little-known relationship between collective bargaining and VPS. It focuses on the retail banking sector, where trade union representation and collective bargaining remain relatively robust. The research identifies an emergent process whereby the growth of bonus schemes has both supplanted collective profit‐share and permitted greater standardization of merit‐pay awards. Unions have therefore achieved some success in terms of limiting variation in base pay, at the same time as the overall purchase of collective bargaining on employee earnings has diminished. The factors contributing to this development are explained.

Suggested Citation

  • James Arrowsmith & Paul Marginson, 2011. "Variable Pay and Collective Bargaining in British Retail Banking," British Journal of Industrial Relations, London School of Economics, vol. 49(1), pages 54-79, March.
  • Handle: RePEc:bla:brjirl:v:49:y:2011:i:1:p:54-79
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    File URL: http://hdl.handle.net/10.1111/j.1467-8543.2009.00768.x
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    References listed on IDEAS

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    1. Janet Walsh, 1993. "Internalization v. Decentralization: An Analysis of Recent Developments in Pay Bargaining," British Journal of Industrial Relations, London School of Economics, vol. 31(3), pages 409-432, September.
    2. William Brown & Simon Deakin & David Nash & Sarah Oxenbridge, 2000. "The Employment Contract: From Collective Procedures to Individual Rights," British Journal of Industrial Relations, London School of Economics, vol. 38(4), pages 611-629, December.
    3. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    4. David Metcalf & Kirstine Hansen & Andy Charlwood, 2001. "Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay," National Institute Economic Review, National Institute of Economic and Social Research, vol. 176(1), pages 61-75, April.
    5. Marsden, David, 2004. "Unions and procedural justice: an alternative to the 'common rule'," LSE Research Online Documents on Economics 3633, London School of Economics and Political Science, LSE Library.
    6. David Marsden, 2004. "The Role of Performance-Related Pay in Renegotiating the “Effort Bargain†: The Case of the British Public Service," ILR Review, Cornell University, ILR School, vol. 57(3), pages 350-370, April.
    7. Bryson, Alex & Freeman, Richard, 2008. "How does shared capitalism affect economic performance in the UK?," LSE Research Online Documents on Economics 51596, London School of Economics and Political Science, LSE Library.
    8. Bryson, Alex & Freeman, Richard B., 2007. "Doing the right thing? does fair share capitalism improve workplace performance," LSE Research Online Documents on Economics 4964, London School of Economics and Political Science, LSE Library.
    9. Richard Hyman, 1997. "The Future of Employee Representation," British Journal of Industrial Relations, London School of Economics, vol. 35(3), pages 309-336, September.
    10. repec:nsr:niesrd:319 is not listed on IDEAS
    11. Marsden, David, 2004. "The role of performance-related pay in renegotiating the "effort bargain": the case of the British public service," LSE Research Online Documents on Economics 4036, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Davide Antonioli & Paolo Pini & Roberto Antonietti, 2014. "Flexible pay systems and labour productivity: Evidence from Emilia-Romagna manufacturing firms," Working Papers 2014143, University of Ferrara, Department of Economics.

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