What is a key characteristic of seniority systems in pay structures?

A key characteristic of seniority systems in pay structures is that they are non-discriminatory. Seniority systems are designed to reward employees based on the length of time they have been with the organization, which can help promote fairness in compensation practices. By tying pay increases and benefits primarily to tenure rather than subjective measures, such as performance or favoritism, these systems aim to create a more equitable environment where employees feel that they are rewarded fairly for their loyalty and length of service.

This aspect of seniority systems helps to build trust and stability within the workforce, as employees know that their compensation increases are not influenced by bias but rather by their sustained commitment to the organization. Consequently, seniority systems can contribute to a sense of security and morale among employees who have dedicated significant time to their roles.

Other approaches to pay structures that might prioritize performance or benefit new hires take different paths, often leading to variability in compensation that may not be perceived as fair by longer-tenured employees.