Many companies are confused when it comes to the promotion system they are going to follow to promote employees. Some of them prefer to follow the easy way of encouraging seniors just because they spent quite a lot of time in the company. Others prefer to promote employees based on performance.
What is the merit-based promotion system?
Seniority is a privileged status attained by an individual who has served in a position or worked for an organization for a long period of time. It usually means that the senior employee gets more money than a new employee performing the same role.
On the other hand, meritocracy is a system in which talented and hardworking people are chosen for promotions based on achievements, not because of their seniority or because they fit a specific gender or ethnic background.
Originally, the term meritocracy was coined by Michael Young in his book The Rise of the Meritocracy. He used the term to show how the UK was ruled by a system that chose intelligence and merit above everything else, including past personal achievements. However, since Young’s book, the concept of meritocracy has taken on different dimensions. It now refers to organizations in which the best people and ideas move ahead.
Seniority versus meritocracy
Promotions are decided on the basis of either seniority, merit, or both. Seniority represents many benefits, including a deep understanding of company culture, vision, and goals. Moreover, senior employees have experience on their side, which is a critical element especially in the selection of high leadership positions. It is often assumed that the more senior you are, the more suitable you are to lead a team. which isn’t always true.
That comes along with its disadvantages. Seniority prevents brilliant employees from getting the motivation to improve their performance if they’re eligible for higher positions. This will lead to labor turnover. In the end, the overall production of the organization will be affected.
That’s why if promotions are based purely on seniority, employees may not be as motivated to perform exceptionally, so it is essential to consider a merit-based promotion system to build an environment that will benefit the business in the end.
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Why you should adopt meritocracy
- Merit-based promotion supports the reward system
The brain has a reward system (1) that consists of a group of neural structures responsible for incentive salience, like motivation, desire, and craving for a reward. When exposed to one, the brain releases dopamine, a neurotransmitter that affects emotions, movements, and, more importantly, the sensations of pleasure and pain. When we get a dose of dopamine, we feel happier and more motivated.
A study (2) published in 2013 found that there is a direct and positive relationship between reward and recognition, job satisfaction, and employee motivation.
If this reward system is fair, employees will feel that their compensation is guaranteed. All they need is to work harder. Having employees motivated can be a significant factor in organizational success. When they are motivated to work at higher levels of productivity, the organization as a whole becomes more efficient and effective at achieving its goals.
This is unlike an unmotivated workforce, which can negatively disrupt an organization and distract from the work. And the reason is that managers underestimate or don’t have the full understanding of the power of the reward system and its influence on employee behavior. So, following meritocracy as a clear and fair promotion system will have a great effect on employees’ motivation.
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It answers the question “Why should I work harder?”
Results are measured. With meritocracy, the better the results you get, the more likely you are to be promoted. It has nothing to do with the number of years you spend at a company. So employees will analyze the importance of their efforts to boost their careers and stand out from the crowd. Contrarily, they may think: “Why should I work harder when I can spend five years in the company and get my promotion?”
Prominent American entrepreneur and blogger Eric Ries said, “Meritocracy is a good thing. Whenever possible, people should be judged based on their work and results, not superficial qualities.” -Eric Ries
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It leads to better results
Companies care about results. If people are chosen to be moved up based on their qualities, that will lead to better quality of work. Better quality means better results for the company in the form of profit and for the employee because they will feel appreciated.
American hiring specialist and talent consultant Russ Minary had a thought on that: “Meritocracy treats the newcomer just the same as the old-timer in the corner office with the company car and all the nice perks. Let the best person win, based on performance. The best idea, the best manager, the best customer service, the best sales results rise to the top.”
Minary added that meritocracy is the way to keep the best talent and keep them motivated enough to remain the best. Even if this dynamic ends up hurting the seniors, it makes room for better performers to take their place, and that’s what you should be most concerned with.
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It’s cost-effective
High achievers are hardworking and ambitious. They seek to be valued and grow their professional spheres. (3) Considering meritocracy in your promotion system will guarantee that they receive the acknowledgment they deserve for their efforts. Contrarily, the company could lose them which will affect productivity.
High performers can be four times more productive than average performers (4). Not only will they lose good talent but these companies will try to replace them by hiring other people who are most probably not interested in working at a company that doesn’t appreciate them.
Moreover, meritocracy provides a fair and understandable system for making decisions when dealing with unproductive and ineffective people in an organization. Keep those people in check and promote those who deserve it. That’s fair because at the end of the day keeping the best people is cheaper than finding new ones.
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It affects company culture positively
If a company treats all employees the same, equality will become a part of its culture. That will attract star players. If the company follows pure seniority as a promoting system, it will create a culture of mediocrity and complacency, which would affect the company’s values and the type of employees it attracts.
In the end, there is no right or wrong. Some calibers have to be promoted based on their length of service. Because their job role requires who have a deep understanding of their businesses. Mostly these businesses don’t require constant innovation. So, seniors get promoted because innovation is not a necessity.
While a business that depends on innovation should consider meritocracy as a promotion system. They have to move brilliant minds ahead to make sure not to lose their edge.
The most important thing is to keep the balance and to do what suits your business. And to do the right mix between the two promotion systems, depending on calibers at your company.
References:
- The Reward System: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2958859/
- A study published in 2013: https://www.ijsr.net/archive/v4i11/NOV151549.pdf
- High achievers seek to be valued and grow their professional spheres: https://hbr.org/2014/11/what-high-performers-want-at-work
- High performers can be four times more productive than average performers: http://onlinelibrary.wiley.com/doi/10.1111/j.1744-6570.2011.01239.x/full
