Problem:
You are the Total Rewards Director for your organization. Over the past few years employees have been leaving to work for competitors. The CEO has expressed that she wants to conduct an organization wide review of the company's current compensation strategy. The company now uses a seniority pay rewards system. The CEO wants to know if they should change to a merit pay strategy in order to make the company more competitive.
Prepare a memo to the CEO outlining your recommendation as to whether or not the company should continue to use the seniority pay system or change to a merit pay system. Be specific as to what model would be the best option for your company, and why. Include pros and cons of your options and conclude with your recommendation. The company is not unionized and is privately held. You do not have to factor in a collective bargaining agreement.