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Strengths & Limitations of Seniority/ Merit Pay Plans

In 300 words or more, discuss seniority and merit pay plans, including the strengths and limitations of such plans within an organization. Discuss the job, organizational and/or other factors that should be considered when deciding between the two.

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There are two traditional methods to pay: seniority and merit pay. Pay systems based on seniority reward employees for longevity, which is important should training costs be high. Economically it is good because a company keeps people, which the organization has spent money training, it keeps people who are familiar with the system and the company culture. It also avoids perception of favoritism and makes it easy to administer pay. When an organization has long-term employees it can build a community.

Unfortunately, seniority pay can also encourage employees to stay in one place and not force them to grow and learn new skills ...

Solution Summary

This solution discusses the strengths and limitations of seniority and merit pay plans, including the job, organizational and other factors that should be considered when deciding between the two plans. It includes links and examples.

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