What is meant by longevity pay?

Longevity pay refers to a form of compensation awarded to employees based on their length of service with an organization. This type of pay is often implemented to reward loyalty and encourage retention among staff members. To elaborate, what exactly does longevity pay entail? How does it function within an organization? What are the benefits associated with this type of compensation for both employees and employers? In summary, longevity pay is a compensation strategy that recognizes and rewards employees for their extended service to a company. It serves to incentivize loyalty and retention, benefiting both the workforce and the organization as a whole. Understanding the specifics of longevity pay, its operational mechanisms, and its advantages can provide valuable insights into its role in employee compensation structures.