Seniority (years of service) should not be the basis of employee compensation. Employees should be promoted and given raises solely on the basis of their work performance and merit. That is a better way to encourage high productivity.

It's common sense that a better machine is the one that produces more products in better conditions and in less time. Why can't that be translated in human labor? An eight hour day of an employee is more difficult to evaluate than a machine's; which could be a reason behind the seniority preference in employee's compensation. What can motivate an employee to be better?

That is, of course, the objectives. Nowadays, there's companies policies that motivates employees to be better in order to have better remuneration. There's lean manufacturing's philosophy of "always improving" that motivates people to gather and produce better and more efficient workplaces. There are companies that includes bonus in their employees' payment for their performance; which could not only be about their productivity in the workplace but their ability to provide ideas to improve other aspects, such as the ergonomy and security of the workplace.

Continuing in the compensation by objectives, there's one tool that manages to link several aspects of the companies in objectives that afterwards can be translated in bonus or merits for the employees. This tool is called Balanced Scorecard. This scorecard involves mainly the next aspects: financial, clients, productivity and human resources. Human resources and productivity are directly involved with work performance and merits; which could be the level of preparation of the employee and the efficiency of producing either products or services.

Using this tool, a group of employees can be graded on their performance and improvement facilitating their remuneration. But it can visualize the level of preparation (by the aspect of human resources) that can provide them of tools to improve their work. This way a company can keep in line their employees productivity and translate them easily in promotions or raises for their employees instead of just using the unmotivated salary of hours per days worked.

If the company is not focused in motivating their employees to be better and prepare themselves to make their company more competitive, the company will probably be stuck in the same productivity and easily reached by their competidors. As well, not including this incentives could generate employees that are just presenting themselves to work for the money without the focus of improving themselves or their company. In this globalized society, people need to keep up with their competition to survive, thus employees' performance is not to be taken lightly. I'm strongly in favor to translate compensations and promotions for people that is focused in improving themselves and the processes, since the hard labor of the employees is one of the main reasons behind the nation's development.