Rewarding Time “in Office”

Don Blohowiak has a new post on his “Leadership. Now. ” blog titled “Endurance Reward ” where he discusses the ‘old-timer, high salary’ issue within organizations. The main question of the article is:

If you exclude assessments of merit and value from determining the worth of longevity, why pay a premium for tenure?

I used to see this issue quite often within organizations, but haven’t run across a lot of the old-timers who are getting paid high salaries mainly because of their tenure….most of the highly paid, long-tenured employees have been sent into early retirement (or fired or let go in a lay off) in cost cutting measures.

I wonder, though, how organizations did (and still do?) justify paying someone a much higher salary just because they have more ‘time in the saddle’ than other similar employees. Anyone know the reasons behind this?