Thinking Ethically



1. Why do youthink unions have traditionally favored a system of linking pay andadvancement to seniority? Who benefits?

Many unions havetraditionally preferred systems of linking advancement and pay toseniority since they manifest loyalty. Employees with greaterseniority usually display an incredible level of commitment to theirwork assignments. Such people endure the changing circumstances attheir workplaces for many years (Zardkoohi &amp Bierman, 2016).Hence, union leaders pressure employers to reward their long-termmembers with higher incomes. The economic benefits from sucharrangements are enjoyed by senior workers. Furthermore, unions canmake greater deductions from the salaries of their long-term members.

2. Why do youthink management might favor a system of linking pay and advancementto performance? Who benefits?

Management mightprefer a system of linking advancement and pay to performance sinceit accomplishes the company’s objectives (Gupta &amp Shaw, 2014).In many instances, organizations are driven by current obligationsand outcomes. Therefore, companies strive to pay off any debt whileremitting monthly salaries. The survival of an entity is directlydependent on its ability to cater for financial obligations. In thisregard, managers will customarily focus on how the employeescontribute to its performance (Larkin, Pierce, &amp Gino, 2012).Although long-term workers may have accomplished plenty for thecompany, they may not make significant contributions to the firm’sprofitability. Consequently, managers prefer to reward top-performingemployees. The company benefits from this system because it canattain its short-term obligations (Larkin et al., 2012). Moreover,the organization can safeguard its long-term future and stability byreducing employee turnover. Diligent workers also benefit fromreceiving higher monetary rewards.

3. What employeerights does seniority-based pay fulfill? What standards for ethicalbehavior does it meet?

Seniority-basedpay ensures that employees are rewarded for their loyalty to thecompany. Many workers are usually eager to pursue higher-paying jobs.In this respect, such employees seek their selfish interests at thecompany’s expense. On the other hand, senior workers manifestincredible longevity (Zardkoohi &amp Bierman, 2016). Theproductivity of such employees improves the company’s reliability.Hence, managers spend fewer resources on orientation procedures.Senior employees are also familiar with the company’s practices andpolicies (Zardkoohi &amp Bierman, 2016). Therefore, conflicts andmisunderstandings are greatly reduced at the workplace. Additionally,long-term workers subscribe to the company’s goals and objectives.

Contrariwise,recently hired employees may be solely concerned with earning aliving. The latter workers show little concern for organizationalsuccess. Entities that reward long-term employees recognize thepriceless value of experience (Zardkoohi &amp Bierman, 2016). Inparticular, new staff members benefit from the guidance offered byother workers. Seniority-based pay ensures fairness since employeesare recognized for their long record of service.

4. What employeerights does a performance-based pay and promotion system fulfill?What standards for ethical behavior does it meet?

Aperformance-based promotion and pay system recognizes the efforts ofstaff members (Larkin et al., 2012). Notably, all companies areconcerned with profit and wealth maximization. Shareholders benefitfrom dividends while employees earn salaries. In many instances,organizations need to increase their revenues to cater for financialobligations such as loans. Firms may also be required to pay rent forhired business premises. Besides, an organization needs to adoptadvanced forms of technology to improve its internal processes (Gupta&amp Shaw, 2014). Hence, workers may need to undergo career trainingand development to enhance their productivity (Larkin et al., 2012).Such expenses are usually covered by an organization’s currentactivities.

Performance-basedpromotion enables a company to apply equal treatment. The system alsoensures that workers with higher qualifications and expertise receivejust rewards (Gupta &amp Shaw, 2014). Employees who manifest higherperformance need to be feted for their efforts. Promotions alsomotivate all employees to improve their output (Larkin et al., 2012).Consequently, the organization can acquire enough revenues to fulfillits obligations. Admittedly, some workers quit their jobs due todiscrimination. In this regard, a performance-based pay and promotionsystem protects a company from losing the services of top-performingemployees.


Gupta, N., &amp Shaw, J. D. (2014). Employee compensation: Theneglected area of HRM research. Human Resource Management Review,24(1), 1-4.

Larkin, I., Pierce, L., &amp Gino, F. (2012). The psychologicalcosts of pay‐for‐performance:Implications for the strategic compensation of employees. StrategicManagement Journal, 33(10), 1194-1214.

Zardkoohi, A., &amp Bierman, L. (2016). How firms shape incomeinequality: Stakeholder power, executive decision making, and thestructuring of employment relationships. Academy of ManagementReview, 41(4), 744-749.