The Valuation of Work - A study of individual salary setting practices for white collar workers

Abstract

With pay-for-performance system becoming a common reward strategy, the salary setting criteria are based on a valuation of the employee‟s work. This indicates that it is not merely the market that sets the price, as suggested by economist who claim that the market sets the price of goods and services. Rather, it is a combination of values that set the price, and therefore, determine the employee‟s worth. To gain understanding of the valuations made during the different parts of salary setting, a mixed method case study among white collar workers at Company X was conducted. Company X is a company in the vehicle industry in Sweden. The study is based on policy documents, interviews and a survey, including all actors part of salary setting. By using the valuation theory from Boltanski & Thévenot and the justice theory, it was possible to analyse the underlying valuation logics. Main results of this study is the complexity of the salary setting process, and with that a complex multidimensional valuation framework of determining the employees worth. Four steps of valuation are detected, of which the organisation is responsible for the first three parts, and the employee‟s interpretation of the previous steps is the fourth step. Further, conflicts in the process mainly arise from previous steps in the process putting up restrictions for later steps in the process. An important finding is that the valuation framework created by Boltanski & Thévenot does not cover all values when determining the employee‟s worth. It seems that there are other valuations in place, perhaps due to the fact that the subject to valuation is a person, therefore needing a more nuanced set of valuation categories.