The idea of lockstep salaries is simple: workers should be paid equally for equal levels of experience or title. Thus, a newly-minted college graduate should be paid consistently throughout a company, and all vice presidents should be paid the same. To receive a higher salary, a worker should get promoted or stay longer at a company to reap the benefits of years of service.
This system remains quite common in the United States. Nearly all government workers are assigned grades and steps that determine the exact salaries they will receive. Elite professional services firms also tend to use these models, particularly in fields like lawwhere almost all associates are paid equally based on years of experience (although the industry is changing in the wake of the global financial crisis).
There are immense benefits to the lockstep model. Foremost among them is that these sorts of salaries can potentially foster greater cooperation within an organization. Raises are no longer perceived as a zero-sum game, especially compared to organizations that use stack ranking as their means of evaluating employees.
Of course, we immediately encounter everyone’s greatest fear about this model: that workers will shirk their work since they know that their individual performance doesn’t matter to whether they get next year’s salary bump.
However, there are several ways around this concern. First, an up-or-out model is quite effective in ensuring that workers are still operating at their peak performance. That’s the model that is used in law firms, in which promotion to partner is the main goal for every associate, but access to that promotion is limited to a small percentage of employees.
Perhaps more importantly, an organization’s culture matters tremendously in how workers approach their craft. Organizations have the ability to inculcate workers to see their craft as above immediate salary goals. Professional service firms emphasize service to the client as a means of building this sort of performance-driven culture even when salaries are lockstep.