Training-Based Pay Scales: Lessons From The Shop Floor

Abstract

Training-based career paths represented an important element of award restructuring, a major innovation in the Australian wage fixation system in the late 1980s. Under this approach skill development, achieved through the introduction of training-based pay points in awards, was designed to provide incentives for productivity growth. However, relatively few detailed evaluations of this reform have been caried out at the workplace level. In the two case studies reported in this paper, training regimes proved to be costly to develop and deliver. Opposition from supervisors and trades people, who were disadvantaged by the reforms, made implementation difficult. The lesson for the two case study companies, clearly relevant to enterprise bargaining in the early twenty-first century, is that cost-benefit analysis of each investment in training must be carried out and that, if productivity growth is to result, the needs of the firm as well as those of employees must be considered.