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Variable Pay Systems and/or Collective Wage Bargaining? Complements or Substitutes?

Author

Listed:
  • Barbara Bechter
  • Nils Braakmann
  • Bernd Brandl

Abstract

Whether collective wage bargaining impedes the implementation of variable pay systems is uncertain. The authors argue that much of this uncertainty is attributable to the fact that research neglects differences in the institutional structure of bargaining. Using representative company-level data for all member states of the European Union, the authors investigate the incidence of variable pay systems in general as well as pay types that include payment-by-results, performance-related pay, and team-related pay under various bargaining arrangements. Findings show that the institutional structure of collective bargaining matters: Variable pay systems thrive under company and multilevel collective bargaining, whereas their implementation is limited under national-level collective wage bargaining.

Suggested Citation

  • Barbara Bechter & Nils Braakmann & Bernd Brandl, 2021. "Variable Pay Systems and/or Collective Wage Bargaining? Complements or Substitutes?," ILR Review, Cornell University, ILR School, vol. 74(2), pages 443-469, March.
    • Handle: RePEc:sae:ilrrev:v:74:y:2021:i:2:p:443-469
    DOI: 10.1177/0019793919883882
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