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The Limits on Pay as a Strategic Tool: Obstacles to Alignment in Non-Union Environments

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  • Jonathan Trevor
  • William Brown

Abstract

Strategic human resource management literature emphasizes the potential of pay to secure strategically desirable employee outcomes for the employer. Strategic pay, in contrast with pluralist models of pay determination, assumes an absence of collective bargaining constraints. This article analyses the process of determination of non-unionized managerial, professional and technical pay in seven leading consumer goods firms that claim to use pay as a strategic tool. It demonstrates that implemented pay practice is often remote from what is aspired to strategically. Despite the absence of collective bargaining constraints, there remain unavoidable obstacles to the ability of management to implement pay systems aligned to strategic goals. These constraints impose fundamental limitations on the use of pay as a strategic tool.

Suggested Citation

  • Jonathan Trevor & William Brown, 2014. "The Limits on Pay as a Strategic Tool: Obstacles to Alignment in Non-Union Environments," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 553-578, September.
  • Handle: RePEc:bla:brjirl:v:52:y:2014:i:3:p:553-578
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    File URL: http://hdl.handle.net/10.1111/bjir.12004
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    References listed on IDEAS

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    1. James Arrowsmith & Keith Sisson, 1999. "Pay and Working Time: Towards Organization-based Systems?," British Journal of Industrial Relations, London School of Economics, vol. 37(1), pages 51-75, March.
    2. Jay B. Barney, 1996. "The Resource-Based Theory of the Firm," Organization Science, INFORMS, vol. 7(5), pages 469-469, October.
    3. Henry Mintzberg, 1978. "Patterns in Strategy Formation," Management Science, INFORMS, vol. 24(9), pages 934-948, May.
    4. Nolan, Peter & Brown, William, 1983. "Competition and Workplace Wage Determination," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(3), pages 269-287, August.
    5. Zulch, Gert & Rottinger, Sven, 2007. "Approach for personnel development planning based on the technology calendar concept," International Journal of Production Economics, Elsevier, vol. 105(1), pages 273-281, January.
    6. Jeffrey B. Arthur, 1992. "The Link between Business Strategy and Industrial Relations Systems in American Steel Minimills," ILR Review, Cornell University, ILR School, vol. 45(3), pages 488-506, April.
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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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