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The management of pay in Britain has changed substantially in recent years. The paper starts with a theoretical discussion of the extent to which individual employers can exercise discretion in the management of their employees' pay. It then examines the ways in which pay is used to secure productive effort. An analysis of the influence of trade unions leads on to an examination of the diminishing influence of collective bargaining in British pay determination. The implications of this are discussed for employer pay strategies, within and between firms, and internationally. It concludes with the consequences of diminishing trade union influence for the distribution of pay.
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