Whither Solidarity? Transitions in Swedish Public‐Sector Pay Policy
| Published date | 01 March 1993 |
| DOI | http://doi.org/10.1111/j.1467-8543.1993.tb00381.x |
| Date | 01 March 1993 |
British
Journal
01
Itrrlu~trrul
Relrrtiori\
31.1
March
1093
(MH)7-1080
Whither Solidarity? Transitions in
Swedish Public-Sector
Pay
Policy
Lois
Recascino
Wise
*
Final version accepted
16
September
1992.
Abstract
As part
of
N
drive
for
eficicvicy und decentralization in government
operations, Sweden
is
implementing a new system
of
puy
udministration
it1
the
public sector that
is
marked
by
a
cleur movemcnt away from centralized wuge
negotiution and fixed salary incwuses towards more ,flexible
and
individual-
ized pay rutes. Despite rhetoric about performance arid eflciency
,
the changes
appeur
to
be focused mainly on expanding wuge differentials among
occuputional groups and offering miirket premiums
to
recruit and retain
valued employees. AIthoirgh the new pay
systPm
has riot been integrated into
u
general munagement approach, it offers considerable challenge
to
the
norms
and values
of
solidarity thut huve truditionally been held
so
strongly in
Sweden.
1.
Introduction
The principle of wage solidarity was the cornerstone
of
the Rehn-Meidner
model which was implemented
in
Sweden after the Second World War.
It
brought about the dramatic levelling
of
economic differences for which
Sweden became famous. Today,
as
one trade union wage negotiator
privately admitted, 'Solidarity
is
no
longer a word people speak.'
The transformation
of
wage policy
in
Sweden from a solidaristic and
centralized system
to
an
individualistic and decentralized approach is the
focus of this article. These pay reforms are
part
of a broader trend towards
decentralization that
in
Sweden and elsewhere is transforming the public
sector. The present study attempts to examine the transitions
in
pay policy
towards local wage negotiations and more individualized pay-setting.
In
principle, these constructs involve
new
values and an emphasis on efficiency
and performance (Sjolund
1989;
Wise
1988).
In
practice, there appears
to be
no
consensus
in
the Swedish public sector about the content of these
reward systems, the way performance-based rewards can be successfully
*Associate
Professor.
School
of
Public
and
Environmental Affairs. Indiana University.
Bloomington, lnd.
76
implemented, or
the
implications of the changes for participants
in
the
labour market, outputs of government organizations
or,
in a broader sense,
the quality of life in the Swedish welfare state.
The trend towards decentralization has been widely embraced as one
solution to the public-sector ‘problem’, that is, a large and expensive public
bureaucracy that is perceived
as
too costly and inefficient. In Sweden, as
in
other countries, a number of different factors account for the trend towards
decentralization, but among these economic difficulties are a common
cause.
In
this sense, decentralization can be seen as a form of crisis
management
in
which central authorities shift the burden of responsibility
for service delivery to other levels of government (Elander and Montin
1990).
In
part, there is
a
presumption that a deccntralized environment is
a
more cost-efficient one, but therc is no body of empirical evidence to
support this belief.
It
can also
he
argued that,
in
its haste
to
unload its
responsibilities to local administrators and private enterprise, central
government prefers not to question this notion.
As
a result, local managers
have received little guidance about the kinds of structures
they
might use
to
implement individualized reward systems
or
the different factors affecting
successful implementation.
‘
Decentralization addresses the almost universal concern for greater
accountability
in
govcrnment.
It
includes the idea of pushing responsibility
further down the organizational chain. Decentralization and individual
pay-setting can be seen as an attempt to enhance the perceived legitimacy
of the public bureaucracy, conveying an image of
‘good’
management and
control
to
the public (Sjdlund
1992).
Decentralization means that local
managers have responsibility
for
wage negotiations and setting bonuses,
and at the same time
it
dramatically alters the role of the trade union
confederations
in
the wage development process. Instead
of
the centrally
negotiated collective wage agreements that have been considered the
underpinning of low unemployment, controlled wage growth and income
equality
in
the Swedish model, the distribution of earnings is determined
largely by local trade union representatives and management.
Decentralization, combined with the use of ncw instruments for pay
administration,’ potentially gives local managers considerable flexibility
in
setting pay rates (Hhggroth
1991).
Decentralization can also be attached to the idea of greater worker
autonomy and the development of workplace democracy.
As
responsibility
and leadership are exercised
in
a less hierarchical system, new values
come forward and a more pluralistic system emerges. This notion
of decentralization is compatible with certain ideas about democratic
representation and was a central theme of the broad workplace
reforms legislated
in
Sweden during the
1970s.
It is not, however. this
aspect of decentralization that is dominant
in
Sweden today. Rather,
decentralization is seen
as
a
means for increasing efficiency, and this is
believed
to
be accomplished through privatization, downsizing and
a
strong orientation towards productivity.
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