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?

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Eric Brown
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Erik – You have a good point. The cost of hiring and training a new employee may well be more than the incremental costs of keeping long-time employees…as long as those employees where doing their job and providing value to the company.

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