The author asserts that job security and salary should be decided primarily by performance rather than by years of service. It is somewhat true that rewarding employees according to their performance could boost the productivity, but workers who have worked in the company for a long time can help the business from many other aspects with their experience and loyalty. In my opinion, both tenure and job performance are crucial criterion for salary and job security.
On one hand, rewarding the employees who perform well in the company can boost the moral and encourage workers to work hard in a short term. Many managers in manufactural industry give salary to employees primarily, if not completely, according to how much works they have done. This policy gives a strong motivation to employees to produce as many products as they can. An impressive example is Chinese State Owned Companies (SOC). Before 1980's, workers' salary was strictly related to years of work in SOC, so employees just finished the basic duty and then waited for the coming year. During the 1980's, the reform of SOC changed the wage’s criterion from years of work to performance, and then the productivity and profit of SOC shifted up.
On the other hand, the effects of this policy could not stand in a long term, because of the competition among workers. After carrying out this policy, employers can find who produce less than the average, and then want to replace less effective employees, always the elder who could not compete with the younger in aspect of productivity. But because elder workers have knowledge to make process of manufacture safer and teach the younger with their experience. In a long term, the employees, who have worked in the company for many years, can hold the productivity in a consistently high level without severe competition, which cause employees exhaust their energy and enthusiasm in a short term.
In addition, rewarding employees for years of service could make them more loyal to the company. This policy can prevent workers from changing works frequently and make training for them more continuous. Furthermore, some elder workers themselves are the treasure for the company. For example, the workers, who hold the key patent of the product, are mean profit to the company, even though they do nothing to productivity.
In conclusion, whether a company should reward its employees for years of service or for their performance is a complex question, which needs a case-by-case study. We must make a balance between these two kinds of policy, and then design a payment plan according to the company's particular situation, with the criterion of not only the productivity, but also the profit and other factors in a long term.
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