One of the biggest threats to the economy is wage inflation and this should be considered when framing the next national wage agreement, the chief executive of the Labour Relations Commission (LRC) has warned.

Mr Kieran Mulvey said that partnership in the Republic was traditionally seen as mainly relating to pay. Wider issues like organisational change and the overall strength of the economy were not always considered.

"The biggest problem in industrial relations at the moment is how we handle the boom," he added. Recent public sector wage settlements were "of concern" and might affect partnership arrangements in the future.

Mr Mulvey was speaking to The Irish Times after delivering an address yesterday to an Irish Productivity Centre conference on reward and recognition. He said partnership needed to be better focused either "on its application or as to whether it is the best solution to every problem".

He said partnership deals of the future would have to deal with a new range of issues, like the euro. "When the euro is introduced there will be complete transparency in every area of business and that is something which concerns us all," he said.

Previous initiatives, he added, "did not deliver the change hoped for". One of the reasons for this was that people decided that sufficient time could not be devoted for "true partnership".

"In this respect I am pleased to see that the Government's Strategic Management Initiative realises that, if is to be done properly, the process of change in the civil service will take place over years and not months and that each step on the way must be distinct and measurable."