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Under the Surface of Individual and Differentiated Pay in Sweden: A Zero‐Sum Game of Performance‐Based Pay?

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  • Ylva Ulfsdotter Eriksson
  • Bengt Larsson
  • Petra Adolfsson

Abstract

Wage formation in Sweden has been decentralized, and the introduction of individual performance‐based pay has increased employer discretion. This article explores practices of local‐level wage determination and argues that existing analyses still have too much focus on the formal (regulatory) institutions to explain what that is going on under the surface. Drawing on interviews with HR, managers, employees and union representatives from both public and private sector organizations, the study concludes that individual and differentiated wage‐setting is delimited locally by small budgets and the actors’ cultural–cognitive and normative expectations. Even though there have been radical changes in collective agreements and policies, we find strong elements of path dependency in local wage determination practices.

Suggested Citation

  • Ylva Ulfsdotter Eriksson & Bengt Larsson & Petra Adolfsson, 2021. "Under the Surface of Individual and Differentiated Pay in Sweden: A Zero‐Sum Game of Performance‐Based Pay?," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 398-417, June.
    • Handle: RePEc:bla:brjirl:v:59:y:2021:i:2:p:398-417
    DOI: 10.1111/bjir.12561
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    References listed on IDEAS

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    1. Lena Granqvist & Håkan Regnér, 2008. "Decentralized Wage Formation in Sweden," British Journal of Industrial Relations, London School of Economics, vol. 46(3), pages 500-520, September.
    2. Thelen,Kathleen, 2014. "Varieties of Liberalization and the New Politics of Social Solidarity," Cambridge Books, Cambridge University Press, number 9781107679566.
    3. Thelen,Kathleen, 2014. "Varieties of Liberalization and the New Politics of Social Solidarity," Cambridge Books, Cambridge University Press, number 9781107053168.
    4. Hall, Peter A. & Taylor, Rosemary C. R., 1996. "Political science and the three new institutionalisms," MPIfG Discussion Paper 96/6, Max Planck Institute for the Study of Societies.
    5. Baccaro,Lucio & Howell,Chris, 2017. "Trajectories of Neoliberal Transformation," Cambridge Books, Cambridge University Press, number 9781107603691.
    6. Paul Teague, 1995. "Pay Determination in the Republic of Ireland: Towards Social Corporatism?," British Journal of Industrial Relations, London School of Economics, vol. 33(2), pages 253-273, June.
    7. Baccaro,Lucio & Howell,Chris, 2017. "Trajectories of Neoliberal Transformation," Cambridge Books, Cambridge University Press, number 9781107018723.
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    Cited by:

    1. Buendía, Luis & Barredo, Juan & Balay, Juan, 2022. "Foreign sector and welfare state in Sweden: From complementarity to tensions," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 310-319.
    2. Saskia Boumans, 2024. "Employer Discretion: The Role of Collective Agreements in the Liberalization of Industrial Relations," ILR Review, Cornell University, ILR School, vol. 77(2), pages 227-250, March.

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