"A distinction is often made between downward
wage flexibility associated with efforts to minimize wage costs and upward
wage flexibility where firms can link pay levels to productivity improvements. Changes associated with the indexation of wages and minimum wage levels; the level (national, industry and enterprise) at which wage determination takes place in an economy; changes in pay, grade and skill structures and pay for knowledge schemes; the linking of pay to performance including gain-sharing and special bonus schemes; and rationalization of total elements of remuneration are said to be amongst the factors which can have an impact on the level of
wage flexibility at the economy-wide and individual firm levels."
(Wailes, N., and R., Lansbury,
Collective bargaining and flexibility: Australia,
Industrial and employment relations department (DIALOGUE), 2000, visited 2009-10-14)
