In a tiered wage system, what primarily influences the pay of workers?

In a tiered wage system, the primary influence on the pay of workers is often determined by their hiring date. This system establishes various pay levels or tiers based on specific criteria, and the hiring date is a significant factor because it usually reflects the length of time an employee has been with the organization. Typically, newer employees are situated at lower tiers with lower wages compared to those who joined earlier, reflecting their longer tenure and, often, their accumulated experience within the company.

The hiring date serves as a straightforward and objective criterion for setting pay levels, which can help create a sense of fairness and predictability regarding earnings as employees progress in their positions. In many organizations, employees might receive regular increases in pay or move to different tiers based on how long they have been with the company, thereby linking their compensation directly to their duration of service. This is different from other factors, such as performance reviews, employee tenure in terms of job performance, or adjustments based on the cost of living, which may also play roles but are secondary in a strict tiered wage framework.