W(h)ither Performance Pay?

By ACIRRT

The 1990s witnessed a surge of interest in, and growing experimentation with, performance-related pay (PRP) methods in Australian organizations.

The 1990s witnessed a surge of interest in, and growing experimentation with, performance-related pay (PRP) methods in Australian organizations. This experimentation arose largely from the shift from 'centralised' award-making to 'decentralised' modes of bargaining and pay determination for non-managerial employees, particularly via enterprise bargaining. Legislative changes during that decade, culminating in the Federal Workplace Relations Act 1996 certainly widened the scope for the adoption of 'flexible' pay practices tailored to enterprise and individual needs. Flexibility was the by-word for workplace change following the economic recession of the early 1990s. Along with numerical, functional, and temporal flexibility, financial flexibility - that is, pay linked to performance - was frequently touted as an essential ingredient for micro-economic 'reform'. Given this, we might expect to find increasing provision for PRP practices of various types in Australian industrial agreements. Yet the data contained in ACIRRT's Agreement Database and Monitor ('ADAM'), and covering over 11,000 collective agreements made at federal and State level since 1993, tells a very different story. If the contents of these collective agreements are any guide, since the economic shake-out of 2000-2001, enthusiasm for most forms of PRP has waned significantly. At the same time, the profile of PRP and other pay practice provisions reveals some significant content differences depending on whether the agreement is federal or State, public or private sector, and union or non-union.

ADAM Report no 42; September 2004)