Rewarding employee seniority comes in various forms such as more vacation time, advancement within the company and often includes higher bonuses or pay.
Good or Bad
The idea that earnings rise along with experience and seniority is a widely accepted concept. Government organizations like the Post Office and U.S. Army advance people based on seniority. Workers advanced to managerial or supervisory positions may receive within-grade longevity increases, bonuses, and promotions to higher grades.
This method of rewarding employee seniority is also practiced in a good deal of Fortune 500 companies. But is this the best way to produce an efficient and happy workforce?
Merit Versus Rewarding Employee Seniority
Basing advancement or pay increases solely on employee seniority can create a discouraging work environment. If an employee has only been working for a company for a couple of years, they may not pulling their weight or be inspired to use their creativity because there is no incentive or reward in it because of their lack of seniority. However, if this same employee worked for a company in which advancement occurred based on merit rather than seniority, he would be motivated to do the best job possible. In this situation, rewards are based on job performance, no matter length of employment. At the other end of the spectrum, seniority-based advancement methods usually don't encourage more recent employees to implement new ideas. Surveys show that in many cases, the seniority-based rewards system actually deters creativity and innovative ideas. Instead, employees wait to offer creative input because they understand that they won't be promoted until a certain amount of time has been served.
The government which has always rewarded seniority is making changes. They have implemented a performance-based method of advancement within two of their largest departments: Department of Defense and Homeland Security. Within these two government systems there are pay bands instead of grade levels, and increases in pay are usually based job performance.
Where Seniority Fits
Just as short-term employees can be discouraged when seniority is the only factor considered for advancement or pay increases, not rewarding employee seniority at all can discourage those faithful employees who have put in years of service. Rewards don't have to be tied to financial advancement. Non-financial rewards make a difference, too.
Types of Employee Rewards
Whether advancement is based on seniority or merit, rewards for employees fall into three categories:
- Financial
- Non-financial
- Psychological
It easy for us to understand financial rewards which include health and retirement benefits, pay raises, bonuses, paid vacation and sick days. But what non-financial and psychological rewards make a difference in the lives of the employee? Here are a few to consider:
- Appreciation for employee's work by co-workers and management
- Receiving compliments for their work from others
- Little presents and recognition
- Job security
- Opportunity to learn new skills
Keep lines of communication open. This involves listening to employees but communication goes both ways. Managers should not only listen, but tell employees when they are doing a good job and are appreciated. Take the time to answer employee questions and even explain to an employee what needs to improve. Setting aside time to talk uninterrupted shows them that they are a necessary element in the workforce. When they walk out of your office, they'll know what's expected, what needs to improve and what they are doing right. Effective communication offers non-financial rewards that benefit both employer and employee.
Finding the Right Balance
If your organization requires a set number of years before an employee can be promoted that policy should be clear at the onset of employment, but in the day-to-day business operation all employees must feel valued and encouraged to participate with new ideas and rewarded for their contributions.
Foster a work environment that allows employees to come up with ideas and spawns enthusiasm for doing the job. This will reduce complacency and the "just put in my time" mindset. Rewarding employee seniority will keep your long-term employees happy, but basing part of the reward system on merit will allow newer, capable employees to enjoy success and recognition as well. Find the blend for rewarding experience and successful work. This reward method allows every employee to become a valued worker and your business will receive the real rewards by retaining the most talented employees.
