Traditional base pay systems reward employees with permanent additions to base pay based on seniority or longevity. Seniority pay periodically increases pay according to length of service, while longevity pay increases pay for those at the maximum pay grade who are unlikely to move up. These systems benefit employees through guaranteed promotions and advancement, and benefit employers by facilitating administration and reducing favoritism. However, they may not adequately reward performance and can slow career growth.

1. Seniority and longevity pay

2.  Compensation is defined as the total amount of the
monetary and non-monetary pay provided to an employee
by an employer in return for work performed as required.

3. Systems in Compensation
 Traditional base pay system.
 Modern base pay system.

4. Traditional base pay system
1. Seniority Pay : Seniority pay systems reward
employees with permanent additions to base pay
periodically, according to employees’ length of
service performing their jobs.

5. Traditional base pay system
2. Longevity pay systems :
It reward with permanent
additions to base pay those
employees who have
reached pay grade
maximums and who are
not likely to move into
higher pay grades.

6. Advantages of seniority &
Longevity pay
 To employees:
1. Guarantee promotions.
2. Advancement in job
field.
3. Reduce employee
turnover.
 To employers:
1. It facilitates the
administration of pay
programs.
2. Employers are less likely
to offend the employees
by showing favoritism to
others.

7. Disadvantage of Seniority
& Longevity Pay
Rewarding performance.
Slow career growth.