Do you feel employees should be paid based on performance, or should they be rewarded for years of experience?

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The interviewer would like to know your thoughts on paying employees based on work performance versus compensating them based on years of experience and loyalty. As millennial employees continue to dominate the work scene, more and more employees are requesting compensation based on delivered results. The interviewer wants to know if you feel that employees should be paid based on tenure or results. Before you get too far into your own personal philosophies as an HR professional, you must research the organization you are interviewing with and their industry to get a feel for the standard compensation for them. You don't want to make it sound like you would come in hoping to reinvent the wheel when it comes to compensation.

"I feel that employees should be paid, and rewarded, based on their performance. A new employee will find motivation in being rewarded for performance, and it encourages healthy competition with tenured employees. I have seen this to be true on many occasions in my HR career."

"As an HR Consultant, I feel that both performance and experience should be weighed when deciding compensation, pay increases, and promotions. I am a firm believer in set pay ranges for positions and bringing new staff into the pay range based solely on their years of experience. From there, I believe that merit increases should be based on meeting performance expectations for the role. You want to ensure that you compensate your highest performers appropriately but that their growth is stable and manageable in the long-term."

Anonymous Answer

"I believe they should be paid for their performance. I think this drives the right behaviors to move the business forward. I don't think seniority translates to performance. I do believe seniority should be taken into a factor for some things, like job bidding."

Rachelle's Feedback

Perfect response, and you make a great case for where seniority should be considered and how it should not trump a high-performing employee.

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Anonymous Answer

"A starting salary should reflect what I bring to this role, which is a combination of experience, skills, and knowledge. In terms of bonuses or incentives, this should be paid only if certain job-specific metrics are achieved within this position's control."

Rachelle's Feedback

Well said! This is a very fair compensation structure.

Anonymous Answer

"Performance should be the main determining factor of salary increases after an employee is hired, as this is how you motivate performance effectively. If they are going to get the same increase just due to the passage of time, you wouldn't be getting any increased motivation for your money and would be retaining the wrong people. However, I believe yearly COLA increases for all, especially in a city, are good practices for retention, although not performance-linked."

Rachelle's Feedback

You show a strong opinion here, which is great, so long as it matches the hiring company's values and approach. If you are not already aware, and the vibe of the interview allows, it could be smart to also ask the interviewer what their preferred approach is to performance-based promotions and pay increases.