Is the principle that employment rewards should be contingent on length of service within the employing organization. Examples of seniority include the payment of an annual salary increment for each year of service and allocating promotions or selecting employees for redundancy on the basis of length of service. Reliance on the principle of seniority derives from two sources: from a belief that competence is related to experience and from a conviction that seniority is fair, especially because it removes the scope for managers to exercise discretion and favouritism when making decisions on reward, deployment, promotion, and redundancy. There might also be an assumption that long-serving employees have demonstrated loyalty to the employing organization and so are entitled to reciprocal treatment. Despite these arguments, the principle of seniority has been subject to considerable attack in recent years. It has been argued that managers should take decisions on reward and labour use and that seniority rules lead to the suboptimum use of human resources. Salary progression, promotion, deployment, and selection for redundancy, it is felt by many, should be based on performance. From a different perspective, it is argued that seniority is indirectly discriminatory and can work to the systematic disadvantage of women workers, who are more likely to experience breaks in their employment. In a key judgment, however, the European Court of Justice in the Cadman case declared in 2007 that seniority-based payments were lawful. Age discrimination legislation also seemingly brings into question the use of seniority on the grounds that it discriminates against younger people. However, the UK age regulations state that it is lawful for employers to continue to operate seniority-based rewards. [See last-in-first-out.]
Subjects: Human Resource Management.