The Process of Wage Adjustment: An Analysis Using Establishment-Level Data

38 Pages Posted: 25 Sep 2011

See all articles by José Alberto Bayo Moriones

José Alberto Bayo Moriones

Public University of Navarre - Department of Business Administration

Jose E. Galdon-Sanchez

Universidad Publica de Navarra ; IZA

Sara Martinez-de-Morentin

Universidad Pública de Navarra

Abstract

This article presents a study of the influences on the factors that shape wage adjustments. The cost of living, comparability with other firms' wages, the fulfilment of collective agreements at sector level, the need to recruit and retain employees, the performance of the organisation, and the climate of industrial relations are included as factors of interest. The analysis was carried out using a sample of Spanish manufacturing plants. Our results show that the structural characteristics of the establishment such as its size or foreign ownership, as well as the wage setting arrangements and trade unions, play a role in explaining the importance of the factors mentioned in shaping wage adjustments. The human resource management policies adopted by the employer seem to be less relevant, although the qualification of workers and the use of pay for performance have a significant impact on the process of wage adjustment.

Keywords: pay settlements, collective bargaining, wage negotiation

JEL Classification: J30, J40

Suggested Citation

Bayo Moriones, José Alberto and Galdon-Sanchez, Jose E. and Martinez-de-Morentin, Sara, The Process of Wage Adjustment: An Analysis Using Establishment-Level Data. IZA Discussion Paper No. 5998. Available at SSRN: https://ssrn.com/abstract=1933355

José Alberto Bayo Moriones (Contact Author)

Public University of Navarre - Department of Business Administration ( email )

Campus de Arrosadia
31006 Pamplona
Spain
34 948 169 377 (Phone)
34 948 169 404 (Fax)

Jose E. Galdon-Sanchez

Universidad Publica de Navarra ( email )

Department of Economics
Campus de Arrosadia
Pamplona, Navarra 31006
Spain
+34 948 16 9338 (Phone)
+34 948 16 97 21 (Fax)

HOME PAGE: http://www.econ.unavarra.es/~galdon/

IZA

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=1494

Sara Martinez-de-Morentin

Universidad Pública de Navarra ( email )

Campus de Arrosadía
Pamplona, Navarra 31006
Spain

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