Seniority (years of service) should not be the basis of employee compensation. Employees should be promoted and given raises solely on the basis of their work performance and merit. That is a better way to encourage high productivity

In certain companies/government offices we notice that employees get a hike in salary based on their number of years rather than their performance. Employees are promoted based on their experience in the particular area.

To some extent, the promotion given to employees based on experience is justified. In companies there is a grading system whereby the performance of a particular employee is judged and depending upon the contribution the employee has made in the concerned department, he is given a specific raise as per company policies. This hike in salary is in the specific range permitted by the company policy and is related to the number of years completed by that employee.

Promoting a person with lower experience would be like ignoring the senior employees contribution to the company. To some employees, this is acceptable but some employees may feel they are abased by this act. This would in turn hamper their efficiency in work as the employees would infer that experience is undervalued in the company.

Another viewpoint of this issue is that promoting employees based on their performance would have an effect that all employees would strive to work at their best and compete with each other. Employees would in turn develop hostile attitude with one another due to constant competition between them.There will be no respect between the employees of different age groups in the company.

To conclude, promoting an employee based on his/her performance is justified but the hike in salary must be relative to the years of experience in the particular company. This would have a better effect in maintaining cordial relationship within the employees.