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HUMAN CAPITAL THEORY HAS BEEN ADVANCED AS A RATIONALE UNDERLYING SENIORITY PAY

Topic: Human capital theory has been advanced as a rationale underlying seniority pay. Merit pay plans appear to be the most common form of compensation in the United States. Although widely used, these systems are not suitable for all kinds of jobs. Pay-for-knowledge pay is becoming more prevalent in organizations today. However, pay-for knowledge pay programs are not always an appropriate basis for compensation. Discuss the conditions under which, and provide examples for, ideal positions for each base of pay. In your discussion also provide examples of positions which would not be a good fit for each base of pay as well. Be sure to provide your rationale. Cite at least two outside sources as references in support of your initial response.

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