ANS. Performance-based and seniority-based pay remain among the
most popular and widely used pay policies to incentivize employees
and maximize workforce performance. We take a structural
contingency approach and present a macro-level study determining
when these policies are effective in improving firm-level workforce
productivity. First, building on the unique benefits and
disadvantages of both pay policies, we argue that they are
effective in different industries. In particular, we expect that
performance-based pay is more effective in core manufacturing
industries where tasks are generally standardized and employee
performance is measurable whereas seniority-based pay is
particularly effective in core service industries where typically,
employee commitment and loyalty is desirable. Second, given that
performance-and seniority-based pay create competing incentives, we
argue that a performance-based pay policy undermines the success of
seniority-based pay and, therefore, that both pay policies are
incompatible.
Experienced Workers Can Teach Younger
Workers:-
- Hard Times: “Younger workers didn’t go through
the recession of the 1970s, and there are still people in the
workplace who remember the Depression,” says Ben Dattner, an
industrial and organizational psychologist and consultant. “They
can pass along wisdom about economic cycles and provide a
long-range view of things.”
- Loyalty: It may be out of fashion these days,
but sticking with one employer or boss has its own rewards. Older
workers know what it means to commit through thick and thin,
Dattner says. It may not be easy to stay the course with one
company -- especially when a quick job change may bring instant
gratification, more pay and better perks -- but older workers know
that some companies do take care of the employees who stay and take
care of the company.
- Experience: Whether it’s corporate policies,
company politics or industry knowledge, older workers know the
ropes, Dattner says. Most of them are happy to pass along what they
know about people, jobs and success.
- Interpersonal Skills: “Older workers are
social animals [who are] very skilled at one-on-one relationships,”
says consultant Chuck Underwood, author of The Generational
Imperative: Understanding Generational Differences in the
Workplace, Marketplace and Living Room. “All the technological
knowledge of younger workers doesn’t compensate for their lack of
interpersonal time.” Older workers can teach younger ones about
basic workplace interpersonal skills such as common courtesy and
team play.
- Regrets: “Older workers usually have a good
understanding of what they regret in their career choices,” says
Penelope Trunk, blogger and author of Brazen Careerist: The New
Rules for Success. “People usually regret not what they did,
but what they didn’t do. Older workers can use those regrets to
pass along ideas on how to steer your career so it can be more
fulfilling.”
- Independence: “For years, younger workers have
been taken care of by parents and their communities, but now
they’re on their own,” Trunk says. “Older workers know how to
depend on themselves. They can teach new workers that when they’re
at work, they can’t count on anyone to take care of them.”