It should pay more to do a good job

"In the run-up to the negotiations on new collective agreements, there should be more opportunities to differentiate wages. Today, many companies choose to remain outside collective agreements, citing rigid wage agreements. We want to move towards more local wage setting, write representatives of all sectors of the Confederation of Swedish Enterprise." This is what Anne-Marie Fransson, CEO of IT & Telecom companies, writes together with Jonas Milton, CEO of Almega, Dag Klackenberg, CEO of the Swedish Trade Federation, Åke Svensson, CEO of Teknikföretagen and others on the debate page of Dagens Industri on January 25, 2013.

For most of us, it goes without saying that it should pay to work hard and do a good job; that those who have made a tangible contribution to the company should receive a higher pay rise.

It should also permeate the negotiations now underway on new collective agreements.

Central agreements that give everyone a large share of pay rises regardless of performance tie companies down and make the link between employee performance and financial reward impossible. Most of the wage space is already locked in at central level.

Most agreements in the business sector contain some form of individual guarantee or general increase. But not all of them. Around 450,000 of the 1.6 million employees in our agreement areas are not guaranteed wage increases. In the municipalities and county councils, only SKL's agreement with Kommunal contains individual guarantees. In central government, there are no guaranteed pay increases.

Our view is that wage setting works better when there are real opportunities to differentiate wages, as the local wage process and individual performance then come into focus.