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Reviews reward management practice in the construction industry, based on a postal survey of larger construction firms. The research results provide little evidence of thorough‐going use of reward management to encourage and reinforce organizational change. Collective agreements survive for manual employees. Non‐manual employees are loosely grouped in broad‐banded grading structures with significant scope for managerial discretion in the treatment of individual salaries. However, there is little evidence of developed performance management systems. The absence of more formalized reward systems may provide a short‐term benefit in allowing considerable flexibility but may have negative implications for long‐term productivity, the control of wage costs and the availability of skills. Given the uneven gender balance, existing pay systems could also give rise to claims for equal pay.

The article seeks to explain the rapid increase in the use of agency “temps” by employers during the 1990s. It tests the thesis of profound change in employers' labour use decisions.

The data was from in‐depth interviews with human resource/line managers in 12 work organisations in the UK responsible for decisions on use of temporary agency labour. Organisations were chosen to include a variety of industrial sectors, sizes and locations.

Although there were common trends in organisations, including declining numbers of permanent jobs and waves of restructuring, organisations varied in their approach: it was not always profound change. The paper finds four distinct types of agency labour use and developed a 2 × 2 typology, depending on whether employers were acting strategically or reactively, and whether they were using temps for supplementation, or more far‐reaching substitution, for permanent workers.

Research is based on UK data and is a “snapshot” of the situation. However, the typology can be used to analyse temporary agency labour usage in other settings and time periods.

The findings could be used by human resource managers to assist them in making decisions on use of agency workers.

The paper makes associations between external and internal contexts within which organisations operate and how these affect decisions on temporary agency labour usage.