The present paper analyses the dynamics of compensation and bargaining agreement at a firm level within the changed bargaining modes following the July 1993 agreement. The paper is divided in two parts. In the first part, the compensation dynamics are considered, with special emphasis on: a) wage differentials among various skilled and unskilled workers, b) the real wage rate from 1975 to 1995 within the metalworking sectors and from 1990 to 1995 for all workers, and c) the changes in the structure of pay from 1975 to 1995, with particular emphasis on the fiscal wedge. The second part, after a brief dissertation of recent changes in trade union bargaining agreements at the firm level in Bologna area in the early 1990s. It then suggests some possible options for intervention in the bargaining strategy of trade unions at the firm level. A final section is devoted to some comments on the urgent nedd to match the process of modernisation in industry and service activities with the importance of mantaining a high level of social cohesion.