Lesson: Merit-based Pay

Are you happy with your salary? Don’t tell me; it was a rhetorical question. The traditional method of determining an employee’s level of remuneration was a seniority-based one. In a nutshell, the longer you worked, the more you earned, and the more likely you were to climb the ladder. This meant that younger workers who had young families, mortgages, cars on finance etc., had to survive on low wages for decades without the expectation of significant salary increases or promotions. We’ve all heard stories of unqualified senior employees receiving promotions while better-qualified, but younger employees struggled in the trenches. Things have been changing for a while now with the introduction of merit or performance-based payment systems. Let’s discuss the good, the bad and the ugly of this shift.