Pay and Working Time: Towards Organization‐based Systems?
| Date | 01 March 1999 |
| Author | James Arrowsmith,Keith Sisson |
| DOI | http://doi.org/10.1111/1467-8543.00118 |
| Published date | 01 March 1999 |
Pay and Working Time: Towards
Organization-based Systems?
James Arrowsmith and Keith Sisson
Abstract
The decentralization of pay and working-time determination has widely been
seen as marking a shift to organization-based arrangements. Empirical
investigation has been limited, however. This paper examines the process and
outcomes of pay and working time through a survey of over three hundred
workplaces in four important sectors: printing, engineering, retail and health. It
®nds that a strong sector effect is demonstrated whether or not there are
national arrangements in place, and that employers tend to move like ships in a
convoy when managing change. It is argued that the convergence and
durability of existing arrangements is associated ®rst with the structural
boundaries provided by markets, technology and labour; second with the
increased importance of legitimacy in a context of growing uncertainty; and
third as a result of shared information sources and networks. The strength of
the sectoral reference raises signi®cant questions for much of current
organizational research, notably its focus on levels of pay and the relevance
of the analytical distinction between the internal and external labour markets.
The research also has a number of important policy implications, drawing
attention to the pros as well as cons of co-ordination in pay and working-time
arrangements.
1. Introduction
Many changes have been recorded in pay and working time in recent years.
The most notable development in the settlement process has been the shift
from traditional structures of multi-employer agreements towards speci®-
cally organizationally based arrangements (Brown et al. 1995; Brown and
Walsh 1991; Millward et al. 1992). The underlying trend seems to be general
and re¯ects (a) adjustments in management strategy in the light of
intensifying competition; (b) the adoption of new production arrange-
ments, such as just-in-time (JIT) and total quality; and (c) key changes in
James Arrowsmith and Keith Sisson are in the Industrial Relations Research Unit, University
of Warwick.
British Journal of Industrial Relations
37:1 March 1999 0007±1080 pp. 51±75
#Blackwell Publishers Ltd/London School of Economics 1999. Published by Blackwell Publishers Ltd,
108 Cowley Road, Oxford, OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.
the organizational context Ð the introduction of divisionalization, budget-
ary devolution and internal markets (Dore 1989; Katz 1993; Marginson and
Sisson 1996; Streeck 1987). The shift has been especially pronounced in the
UK, however, where speci®c considerations include the signi®cant pre-
sence of multinational companies, the particular scope and form of
collective agreements, and the opposition to multi-employer arrangements
expressed by Conservative governments throughout the 1980s and early
1990s.
If the basic facts seem beyond doubt, the implications are far from clear.
One view of this process, which stresses internalization, would see the shift
as a natural development from the reconstruction of workplace industrial
relations in the wake of the Donovan era to the HRM organization of the
future. Management, in other words, is seen to be capitalizing on the
bene®ts of the internal labour market elaborated by Kerr (1954) and
Doeringer and Piore (1971). Employee retention, development and
commitment are the goals, and personnel policies are designed with a
view to a longer-term, mutually dependent employment relationship.
A second, and increasingly dominant, interpretation emphasizes market-
ization. This does not necessarily mean the establishment of market forces
as the main determinant of pay and working; rather, it implies the release of
management from the perceived shackles of regulation, be it sector- or
organization-speci®c, and an increase in its authority and discretion
(Rubery 1996). Many of the implications here are the antithesis of
internalization: individualization and fragmentation, along with growing
pay inequality, ¯exible working-time arrangements and little or no employ-
ment security (Cappelli 1995; Rubery 1997).
Clearly, this is a fundamentally important debate, with signi®cant
theoretical and policy implications, to which we return. Arguably, however,
to prioritize the interpretation is to put the cart before the horse. With
honourable exceptions (e.g. Jackson et al. 1993; Walsh 1993), there has
been little systematic empirical analysis of the impact of the shift to
organization-based arrangements. Many questions about what is happening
have yet to be asked, let alone answered. These include to what extent
there have been any signi®cant and widespread changes in pay and working
time in the sectors making the switch; whether there are structurally
constraining differences between these sectors and those that have stayed
with sector arrangements; whether the changes that have taken place are
mainly organization-speci®c or sector-wide; and, if the latter, whether there
are processes, formal and informal, that ful®l the role of sector agreements
in achieving a measure of standardization. Answers to these questions are
needed not only to understand the dynamics of pay and working-time
determination, but also to get to grips with what Nolan and Walsh (1995:54)
have described as one of the `more intractable' tasks in the study of
industrial relations, namely `unravelling the connection between changes in
the employment relationship and the wider labour market context'.
It is with these questions that the paper is concerned. The data are from
#Blackwell Publishers Ltd/London School of Economics 1999.
52 British Journal of Industrial Relations
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