GMAT Essays (AWA)

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.

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations or reading.

The discussion on whether compensation should be based on number of years of experience or based on performance is an interesting one . On one hand , one may argue in favour of it stating that experience helps in gaining maturity to evaluate more appropriately in diverse corporate situations. On the other hand , one may argue that the maturity to respond to a situation has nothing to do with experience and that compensation should be based purely on whether or not the individual is delivering the positive results. In my view , compensation should be based on an individual's capability and not his or her years of experience .

First , compensation is just the business's way of acknowledging the efforts of individuals who are delivering the results. This has nothing to do more experience or less experience. For example , consider a developer with 10 years of experience who delivers a code with 10 defects to a client . Contrast this with a developer who has 2 years of experience and delivers the same piece of code with 2 defects . Surely, the latter' developer's efforts and not the former's will help his or her organisation to meet the client expectations which might result in more business. So, in this scenario , it would be logical to provide better incentives to the junior developer than the senior developer just because the junior developer delivers results which help the over-all future of the organisation.

Secondly , compensation helps in motivating an employee and retaining the right talent. So it is absolutely necessary that an employee gets recognised for showing more commitment , living upto the organisation's goals etc . Now this has nothing to do with number of experience . An employee having less experience could very well exhibit the right attitude towards delivery. If seniority is treated as the primary criteria for employee benefits and renumeration, it would serve as a disincentive to all lesser experienced individuals who are delivering far better than the more experienced one. This might manifest in multiple ways - it might result in employees taking less ownership of work, employees not striving to exceed expectations, employees leaving the firm to pursue greener pastures.

Thirdly , compensation is an indirect way of promoting the right talent within the organisation. Renumerating employees for the right reasons is very important to serve as a precedent for other employees. Again if employee compensation is based on seniority, then it serves as a disincentive for the younger employees who might very well have immense potential . Thus, if other employees realise through these examples that better work performance results in better incentives , they will feel motivated to follow in that direction and thus benefit the over-all organisation.

In sum , I think , employee performance should be the primary criteria in evaluating employee renumerations and benefits so that the right precedent is set for the better future of a business. I do agree that experience adds value to an organisation but should not be the top of the chart criteria for evaluating compensation.