Salaries |  How are wages and salaries set? The question might be odd but salary determination is in the process of change, shifting away from central agreements towards individualized salaries tied to personal professional skills. Advocates claim that not until we treat everyone equally can independent and fair salaries be set.

Most agree that next year’s collective wage talks could be the toughest in memory. There will be a struggle to impose a moratorium on central deals to focus instead on where wages belong: at workplaces and among employees.

“Many believe the employers’ argument; wage agreements have to improve,” says Kjell Frykhammar, wages expert at Swedish Enterprise. “Businesses can help by discussing with employees what wage deals should include.”

A study by the employer and trade organization for the Swedish service sector, Almega, shows that 87 percent of those asked thought that wages should be pegged to work responsibilities and 70 percent wanted to negotiate on their own with management . Only 35 percent wanted the old way, with wages set nationally.

“Individual wage talks are self-evident for many young people today,” says Mia Alm at Compensation Upgrade, a company that helps businesses develop systems for individual wage structures.

What younger employers see as a no-brainer is that someone who commits and performs well at work should be better paid than somebody who takes it easy and dodges responsibilities.

“Wage is the most tangible way of encouraging and rewarding good work,” writes Gunnar Wetterberg of Saco, the confederation of white collar unions.

Pressure to change the wage talk framework is from the grassroots, from employees and even local unions. Businesses adopting the new approach also get more involvement: wage talks must be based on value parameters — a scale — applicable to all employees, and address all facets of an employee’s contribution. At Fagerhult Retail, an electrical lighting group, assessment talks are the key to wage determination. They occur twice a year, focusing on results, skills and personal qualities. How well the three segments are serviced is reflected in paychecks.

“We want ambitious, committed staff and can’t hold them back by paying equal wages,” says Katarina Ferm, the company’s staff and economy comptroller.

So the answer to our initial question must be: it depends. Because no two companies are alike. But some factors apply to all companies, even with individual wage determination — principally, transparency for the bases of wage setting, and the capacity to treat everyone equally. In a media interview, Lars Vestergren, CFO at Centri (orthopedics manufacturers), mentioned other factors:

“Simple rules for adjustable wages, close dialogue, and explanation, explanation, explanation.”

Anders Carlsson