Analyze the Traditional Bases for Pay

Analyze the Traditional Bases for Pay and in your discussion include seniority and merit pay systems.

Traditional bases for pay are essential compensation methods use in Human Resource Management. In order to meet the needs of the organization there has to motivated employees in place. Motivated employees will almost certainly exhibit high performance and commitment to an organization. The job of any HRM is to figure out what the bases for pay will be and how it will fit with the culture of the organization. For example, one company may base pay on individual or group work, when another company may see more success (as far as motivation goes) in profit sharing. According to our text, "Seniority pay and longevity pay systems reward employees with periodic additions to base pay according to employees' length of service in performing their job" (Martocchio 76).

Seniority pay is put into play in order to develop a base pay structure that is reasonable and motivates longevity with the firm. The most common form of traditional base pay is seniority or longevity pay. Seniority pay includes incremental increases in pay based solely on the employee's length of employment. An advantage with seniority pay is the firm can project labor costs and employees have no basis from claiming favoritism in salary levels.

Merit pay systems based salary increase on performance during specific times of working with a firm. Performance could include output or some other factor considered important to an organization, such as customer feedback. The success of merit pay programs depends upon the employee recognizing that personal effort will translate into pay increases. Merit pay systems depend solely upon performance.

Works Cited:

Martocchio, Joseph. Strategic Compensation A Human Resource Management Approach. 5th. Upper Saddle River: Prentice Hall, 2009. 10. Print