Critical Reflection
HR & IR Systems
William Kwok Enoch Ng Ainsley Hart Martina Nikic
Axel Durand-Smet  Mahmoud Abu Hannoud
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Introduction
Discussion on the assigned article
Common theme of the assigned articles
Discussion on the additional articles
Shared theme and scope
• Centralized Wage Bargaining
• Government Intervention / Partisanship
• Conclusion & Factbook Application
Table of Contents
• Questions to think about:
• 1. What are the factors that you think contribute to the
income equality/inequality of the countries?
• The levels of wage inequality and its determinants is a
fundamental component of HRM
• Importance of understanding the research structures,
sampling, and measurement methodologies
Introduction
• Article 1:
Comparative Research in Human Resource Management:
A Review and an Example by Brewster, C., Tregaskis O.,
Hegewisch, A. & Mayne L. (1996)
• Article 2:
Wage-Setting Institutions and Pay Inequality in Advanced
Industrial Societies by Michael Wallerstein (1999)
Assigned Articles
• Article 1
• Provides a deep understanding of the importance of the
research structures, sampling, and measurement
methodologies
• Serves as the backbone and provides a comprehensive
standard
• Article 2
• Depicts the wage-setting determinants
• Gives us ideas of the dimensions and variables to focus on
Common Theme of Articles
• Article 3:
Economic Globalization, Domestic Politics, and Income
Inequality in the Developed Countries: A Cross-National
Study by Vincent Mahler (2004)
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• Explains the impact of four 'domestic political' and three
'economic globalization' factors towards income inequality
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• Extracted data from the Luxemburg Income Study
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• Concludes that political factors are more significant
determinants
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• Limitation: Lack of comprehensive explanations on how each
factor affect income inequality
Additional Articles
• Article 4:
Institutions, Partisanship, and Inequality in the LongRun
by Scheve and Stasavage (2009)
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• The political effect on income inequality is
minimal, especially in the long run
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• The decrease of income inequality had presented
before collective bargaining was introduced
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• This article provides a more precise and
accurate test on the proposed factors
Additional Articles
• Article 5
Has the national minimum wage reduced UK wage
inequality? by Dickens and Manning (2004)
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• Supports the previous article that government partisanships
and collective centralization are not the major determinants of
income inequality
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• The effect of the national minimum wage established in the
UK towards income inequality is minimal
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• Demonstrates an empirical example from a developed
country, which may provide support to the previous article to
some extent
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• Research was done in only one country
Additional Articles
• Article 6
Diverging Developments in Wage Inequality: Which
Institutions Matter? by Rebecca Oliver (2008)
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• that the major determinant of wage inequality is
whether the wage-bargaining practices in a country
include the use of wage scale
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• Concludes that the increase in the inequality of wage
is less likely to occur
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• Wage scale provides an insightful perspective to look
at the factors that lead to wage inequality
Additional Articles
1. Data analyzed & methodologies in regards to the
determinants of wage inequality
2. Two Major Determinants of Wage Inequality
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Centralized Bargaining
Government intervention
Shared Theme and Scope
• Positive relationship between centralization and egalitarian
distribution of wage
• Mahler and Wallerstein’s explanations corresponding
• Mahler’s three reasons:
• More efficient
• Improve political
position of workers
• Contributes to
distributive justice
• Wallerstein’s explanations:
• Economical
• Political
• Ideological
Centralized Wage
Bargaining
• Scheve DISAGREED with the previous findings!
• His study shows no evidence of a positive
relationship between centralized bargaining
and income equality
• Wage inequality is instead affected by another
underlying economic force
• There is NOT a casual correlation
Centralized Wage Bargaining
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Spectrum of government intervention (degree)
Left governments assumptions
Empirical results
Causal relationship?
Example: National Minimum Wage
Minimal effect on entire labor sector
Government Intervention
/Partisanship
• Limitations: appropriateness and compatibility of
methodologies (Article 1)
• Centralized bargaining: a controversial matter
What is the appropriate method of research?
Conclusion
• Difference in level of wage bargaining between
countries
• Degree of government intervention in wage
setting of countries
• Poland (conservative liberalism ) vs Switzerland
(democratic)
Factbook Application
THANK YOU