Career and wage development of salaried employees in industry
Introduction
Interest in companies’ remuneration and hierarchy practices has grown continuously in economic research. Several different theories and hypotheses about these practices have been put forward in recent decades, but the actual behaviour of companies has so far been described very little. This study seeks to contribute to filling this research gap by examining how the career and wage development of salaried employees in industry has been determined in Finland. The primary data used in the study is a combined cross-sectional and time-series dataset collected by the Confederation of Finnish Industry and Employers covering the years 1980–1993, which enables changes over time in the position and remuneration of individual salaried employees to be tracked.
Salaried employees in industry consist primarily of three groups: technical salaried employees, industrial salaried employees, and upper salaried employees. Technical salaried employees include, for example, supervisors, technicians, construction foremen, and machine masters working in technical roles. Industrial salaried employees (formerly office employees) are mostly persons with a commercial education who work in industrial establishments in roles such as secretaries, cashiers, and payroll clerks. The wages of technical salaried employees and industrial salaried employees are partly regulated by collective agreements. Salaried employees placed above these agreements are referred to as upper salaried employees.
Technical salaried employees and industrial salaried employees each have job demand categories defined in their respective agreements. In this study, the career development of these groups of salaried employees is mapped by tracking how probable changes in the job demand level (pay grade) of different salaried employees have been during the study period. The study thus examines the frequency of various pay grade transitions and what kinds of changes in earnings have been associated with these transitions. The background characteristics of salaried employees are used to identify what factors may lie behind the different career profiles observed. The overall picture is supplemented by also examining the effects of changing employer on the career development of salaried employees. Similarly, the turnover of salaried employees is examined under different economic conditions. For all groups of salaried employees, pay mobility is additionally mapped by examining changes in their relative pay position over time. Since the internal mobility of industrial salaried employees is being mapped in this study for the first time, the key analyses are also conducted separately for men and women and for four bargaining sectors (chemical, metal, forest, and construction industries).
The study proceeds as follows. Chapter 2 briefly describes the remuneration system for industrial salaried employees and the theoretical considerations relating to corporate remuneration systems in general. Chapter 3 presents the data used, first in general terms and then separately for technical salaried employees and industrial salaried employees, whose career development is subsequently examined in greater detail. Chapter 4 examines the functioning of the market for technical salaried employees, including the connections between their career development, remuneration, mobility, and turnover. Chapter 5 conducts the corresponding analyses for industrial salaried employees. Chapter 6 examines the pay mobility of all groups of salaried employees by investigating the frequency of changes in relative pay position occurring during different periods. The conclusions of the study are finally presented in chapter 7. (AI translation)
- ISSN: 1236-7176
- ISBN: 951-9282-82-3
