Right on the money: What do Australian unions think of performance‐related pay?
Abstract
Purpose
The diffusion of performance related pay has attracted considerable academic attention over the past decade. While much contemporary debate has focussed on the excesses of executive remuneration at the “big end of town”, what is not so prominent are the views of unions representing employees at the other end of the remuneration spectrum: this is the purpose of this paper.
Design/methodology/approach
Evidence was gathered at two levels using two sets of research instruments: in‐depth interviews with senior union officials, and primary documentation analysis with specific reference to performance appraisal and performance‐related pay clauses in union Enterprise Bargaining Agreements.
Findings
Document analysis reveals that performance appraisal and performance‐related pay clauses range from mere stipulation of existence to detailed processes and principles of design and implementation. Specific clauses in the white‐collar unions’ agreements suggest that they are not totally opposed. However, the lack of performance appraisal and performance‐related pay clauses in the blue‐collar unions’ agreements illustrate their propensity to restrict pay increases to a job classification structure. Although there were clauses that aimed to ensure a performance‐oriented culture, their agreements seem to be mere sentiments. Overall, only one union supports the notion of performance related pay; the others find performance appraisals difficult to embrace. Negative experiences and consequent problems lead them to argue that the process is complicated and usually puts workers at a disadvantage.
Originality/value
Strands of different explanations account for union opposition, but the principal issue is that performance appraisal has only an evaluative function, that is to link performance to pay. To minimise problems in shaping PRP schemes, the unions advocated the integration of a social dimension; transparency and equality.
Keywords
Citation
Hanley, G. and Nguyen, L. (2005), "Right on the money: What do Australian unions think of performance‐related pay?", Employee Relations, Vol. 27 No. 2, pp. 141-159. https://doi.org/10.1108/01425450510572676
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited