What best describes a tiered wage system?

A tiered wage system is characterized by a method of paying workers based on their hiring date. In this system, employees are often categorized into different wage tiers or levels depending on how long they have been with the company. This means that newer employees may start at a lower wage tier, while those who have been with the company longer may earn higher wages as they progress through the tiers over time. This structure can incentivize retention, rewarding experienced employees for their loyalty and tenure with the organization.

In contrast, the other options describe different concepts. Performance-based payment structures focus on rewarding employee performance rather than tenure. Industry standards refer to wages that are typically dictated by market trends within a specific sector, while strategies for reducing operational costs may involve various tactics that do not directly relate to how employees are compensated based on their hiring date. Hence, the defining characteristic of a tiered wage system is primarily centered around tenure and not performance or external standards.