Crowdsourcing Solutions

Seniority System: Definition, Advantages and Disadvantages


Define Seniority:

Seniority is nothing but the experience of an employee working in a particular company. The company provides certain privileges for their long service and loyalty towards the company.

They also serve the employees by giving great opportunities in the company for their career growth for serving the company.

As per their experience, they will be paid higher than the other employees who were working for a short time in the company.

seniority system advantages disadvantages

Seniority in the Workplace:

Seniority rule at work plays a vital role in the success of the company. They will provide opportunities to become representatives or leaders for a particular group of employees. They will treat as a valuable employee. The following points help you understand how does the seniority system work.

1. Rewards:

An experienced or a senior employee is a person who understands the working environment of the company better than its founder. Normally, a person who holds such kind of seniority in his/her work in the company is a person who experiences rewards and appreciation in the company.

Most probably the value of his/her knowledge or his/her opinion on certain stages of the company matters the most for the development of the company.

2. Promotions:

If the person who holds several years of working experience in a certain field of work, then he/she is deserving some shot at the promotion in his/her duty of work.

Expecting promotion after working so long in the same company is like expecting some kind of appreciation and loyalty towards his/her work for the sake of the company.

Therefore, a person with a seniority quota of the work in the company will deserve a better shot at the promotion.

3. Pay Scale:

And when it comes to the salary package of that experienced employee of the company, it is measurable in terms of his/her working nature and accomplishment in his/her duty of work.

A person with a seniority system with his/her working environment expected of receiving an excellent working and salary package for themselves. Therefore, having a senior and experienced employee in the company will beneficial for the company similarly it is beneficial for the person as well when it comes to salary packages.

4. Helps to build work culture and inspiration:

The seniority system brings some sort of inspirational and creative elements in the working environment of the company. It is very essential for the company that it cultivates some working culture and inspiration among the employees and the working environment of the company.

Therefore, the seniority system develops an entire working culture and environment of the company. It improves the energy and working behavior of the company.

Designing a Seniority System in a Company:

  1. All the primary rules which manage the seniority system in a company should mention clearly
  2. The groups or employees who are not covered under the ground rules should list down separately.
  3. To avoid any type of controversy later, all the information like transfers, probation periods, breaks in service, etc and their effect on the seniority of the employees should be included in the rules.
  4. The key members of the labor unions should not affect by seniority rules especially during the time of layoffs or cost-cutting procedures
  5. The job features of the company like layoffs, transfers, promotion, shifts, etc which judged upon seniority must be clear and transparent.
  6. The segmentation of employees under seniority is mainly done in 4 parts, they are
  • Company level seniority
  • Department level seniority
  • Job role level seniority
  • Rate bracket seniority

Performance Vs Seniority:

Sometimes when people receive a phrase with performance and seniority in their working culture. It is most of the time misinterpreted in the way that performance and seniority are the same things, but it is wrong.

Performance and seniority are two different things when it comes to their environmental behavior. It’s something that can be measured and showed in the working behavior of the employee.


Performance can measure in terms of their involvement in the development of the company. And Performance is something that distinguishes hard work and quantity of work assign to an employee.

Therefore, if a person holds a great performance in his/her work which helped the company grow in the best manner, then it may be an employee’s hard work which helped them get to pay for performance in their work.

Seniority at work:

Seniority is something that comes with experience in such kind of work. It is possible that the employee with seniority in his/her position may not great with his or her performance of work assigned to him/her.

Therefore, it is better to understand that seniority is different from the level of performance which quantifies the successful completion of the assigned work.

Seniority Pay Vs Merit Pay:

Seniority Pay:

Merit Pay and Seniority Pay are two different things when it comes to their nature of work. Seniority pay paid to an employee who holds a certain level of seniority in his/her working and working environment. It termed as one of the pay which gradually increased as per the performance of the employee for all those years of his/her work.

Merit pay:

Merit-based pay is such kind of pay where an employee is considered worthy of promotion and merit pay for the quality of his/her work. Sometimes a company can recognize the quality of the work completed by their employees and they decide to provide such employees a merit pay considering their quality and quantity of work.

1. The reward for loyalty:

When it comes to loyalty, a person with seniority in his/her several years of working environment consider as one who deserves some sort of reward, for their loyalty towards the company.

Meanwhile, an employee with a merit pay system will not receive any sort of reward for his/her loyalty towards the company. And that is because the employee received promotion for the work he/she provided for the development of the company.

2. Avoids partiality:

It helps disguise partiality issues between employees of the company. And that can lead to less level of issues between the company.

When the employee starts differentiating work to their employees considering their seniority and their merit, then all employees of the company may experience some sort of job satisfaction for the work they delivered.

It may resolve practicality issues within senior and merit employees.

3. Career disaster for talented employees:

Most of the time after coming across all sorts of benefits of seniority systems and merit-based system, there is still part of the work which can create a drift among employees of the company. And that can be possible with their career development.

Therefore, seniority pay and merit pay in terms of salary package can create a career disaster for the talented employees of the company.

Because if the company starts recognizing senior employees and merit-based employees then the rest of the employees of the company who are talented enough are treated unwanted for the company.

4. Opportunities for hard-working employees rather than seniors with no knowledge:

Most of the company redeem senior employees even if they are not efficient with their work, but they still deserve to be part of the company.

But instead of redeeming such seniors the company can give some opportunities to their hard-working employees so that they can show the potential of their knowledge.

Therefore, providing opportunities for employees with hard working will power can turn as one of the greatest decisions of the company.

Work Seniority System Pros and Cons:

There are different types of Pros and cons of seniority systems in the company. But most importantly, these Pros and cons create an understanding level where the company decides to benefit from the seniority available in the company environment which can ultimately lead the company to its successful development.

Pros of Seniority System:

These pros of seniority will create a disguising line between seniority and knowledge of those experienced employees.

1. To secure employment:

The company expects such employees or candidates for the company who have experience in a similar field. Having seniority in their work environment creates better working security for the employees of the company.

As the employee holds several years of working experience in the work field, then such senior employees can be required by the company.

2. Extra benefits:

When the employee holds seniority in their work and their working filed, it is quite clear that such employees experience some kind of benefits in their work.

For all those years of their commitment and hard work in the company, the employee will benefit from some advantages for their seniority in the company.

Cons of the Seniority System:

These Cons of seniority system can provide knowledge about their disadvantages having seniority in their work.

1. The extra cost for the company:

It is agreed that holding onto senior employees and eliminating talented employees can be a little disappointing for the company. And that is because when the company decides to continue with senior employees and eliminates young and talented employees in the name of cost-cutting, is a dumb decision because senior employees are those who have knowledge and experience in their work but talented young employees can bring creative ideas for the development of the company.

2. Imbalance the competition between employees:

Seniors must be encouraged by the company to make them continue their precious services to the organization.

At the same time, the company should give equal opportunities to the employees who perform well, what is the use of giving appraisal to the one working long with bad performance through their service.

The leadership team should notice that the right people should give promotions so that they will help in organization growth and development.


Therefore, the bottom line is that it will create unnecessary politics between the employees because of giving priority to seniority rather than merit.

More qualified, and more creative people must be rewarded, hence the seniority system is slowly diminishing. And it is better to be aware of all these facts about the seniority systems of the company.

These advantages and disadvantages can make one understand more about seniority and how does the seniority system work in the company.