Editing Performance appraisal (section)

====Seniority's Impact on Wages and Promotions====
Seniority significantly influences wage structures and promotions, often resulting in a wage premium for employees with longer tenures. Union-negotiated contracts may include regular wage increases based solely on years of service. This approach can enhance job satisfaction and loyalty, as employees feel rewarded for their long-term commitment. However, this system may also lead to inefficiencies if individual performance and skills are overlooked. High-performing employees with shorter tenures might feel demotivated if they see senior colleagues receiving higher wages and opportunities simply due to their length of service. This structure can also impose financial burdens on organizations during economic downturns, as they must continue paying higher wages to senior employees regardless of business performance. To address these issues, some companies have implemented hybrid wage systems that combine seniority with performance-based incentives, allowing them to recognize both experience and merit.<ref>{{cite journal |last1=Dustmann |first1=Christian |last2=Meghir |first2=Costas |title=Wages, Experience and Seniority |journal=The Review of Economic Studies |date=January 2005 |volume=72 |issue=1 |pages=77–108 |doi=10.1111/0034-6527.00325 |url=http://discovery.ucl.ac.uk/3908/1/3908.pdf }}</ref><ref name="Shy Stenbacka 2018 Dynamic labor market competition">{{cite journal |last1=Shy |first1=Oz |last2=Stenbacka |first2=Rune |title=Dynamic labor market competition and wage seniority |journal=International Journal of Industrial Organization |date=November 2018 |volume=61 |pages=130–154 |doi=10.1016/j.ijindorg.2018.08.009 }}</ref><ref>{{cite journal |last1=Böckerman |first1=Petri |last2=Skedinger |first2=Per |last3=Uusitalo |first3=Roope |title=Seniority rules, worker mobility and wages: Evidence from multi-country linked employer-employee data |journal=Labour Economics |date=April 2018 |volume=51 |pages=48–62 |doi=10.1016/j.labeco.2017.11.006 |hdl=10419/129663 |hdl-access=free }}</ref>