chapter  6
28 Pages

Salary progression systems: : Marc Thompson

ByMARC THOMPSON

This chapter critically reviews theoretical and empirical evidence to consider developments in salary progression systems in the UK over the last two decades. At a theoretical level, it outlines the key economic and psychological frameworks, arguing that both need to be considered together to enrich our understanding of salary progression systems in practice. The empirical data suggests that, whereas the 1980s and early 1990s were

characterised by a shift to performance-based salary progression, convoluted pay structures and high levels of management control in the context of looser labour markets, the last 10 years or more have been marked by the combination of skill shortages with equal value concerns to challenge this model and re-establish more transparent salary progression systems. A key trend has been the emergence of ‘hybrid’ salary progression schemes combining behavioural and output-based metrics. The research evidence on salary progression systems and pay systems in

general reveals a field that is not in good health. There is a need for more rigorous, in-depth, longitudinal research on change in reward systems in order to develop more robust theory that can be useful to practitioners.