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CHRP Knowledge Exam · Question

What is the term for a compensation system that links an employee's pay increases to their length of service within an organization?

Seniority-based pay systems reward employees based on the duration of their employment, assuming experience correlates with value.

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Question: What is the term for a compensation system that links an employee's pay increases to their length of service within an organization?

Answer options:

  • Merit-based pay ✅ Seniority-based pay
  • Gainsharing
  • Piece-rate pay

Correct answer: Seniority-based pay

Explanation: Seniority-based pay systems reward employees based on the duration of their employment, assuming experience correlates with value.

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