I have worked in both a very strictly structured seniority system and an alternative for equal amounts of time over the last 20 years or so. Some people will win and some will get screwed in both systems as the dynamics of the industry dictate.
The strict (absolutely everything done by seniority) system only works for the majority of employees if many conditions are satisfied.
1. You all join at around the same age.
2. The company continues to operate at the same level or expands at a continuous rate.
3. The pay structures within the company and work requirements / rostering within fleets are evenly balanced.
If we examine the above three:
1. May deter older applicants, if they come they will never become senior enough to earn the bigger salary, get the pick of leave, good trips, good aircraft and consequently will spend their career earning considerably less and have a much sh_ttier life style than others doing the same job in the same company.
2. Very few companies expand continuously in this industry, so even the youngest pilots can get screwed if they join at the end of an expansion phase. They will get stuck with the low pay and crap flying and leave for however long it takes for the expansion to re-occur. Then it will all depend on when it starts and stops, but either way they will always earn less money for longer and put up with a poorer set of conditions than their mates who got in at the beginning of the cycle (maybe just a few months earlier). The old saying of "one day it will all be yours at the top of the list", simply does not hold true for most of the employees.
3. If you have different pay for different aircraft you can get stuck earning less money for a long time. Until you can bid to change aircraft type or get promoted you are stuck unfairly. This then causes a lot of cross training between fleets at great expense and actually decreases the ability of the company to react quickly to changing market requirements. This in turn slows down your chance of escaping.
Some of you lucky guys out there will find it hard to believe the above or refuse to listen to your mates complaints because obviously you deserve everything you get. I am not going to argue that point.
The point I make is that everyone has they right to the same job satisfaction and income potential while working for the same company doing the same job. Strict seniority does not provide this and it's methods of application can actually make the inequities much worse.
There are alternatives that help address some of the above. Implementing them into existing seniority systems is the biggest problem though. Taking from the rich and giving to the poor has proved to be an insurmountable problem (unless your name is Robin Hood or you work for the Tax department) within established airlines and airlines don't see the need for change. Particularly if they think you will stick around because of the carrot of seniority.
The system I work under now is not perfect but it is fairer to all in general.
Rotating bidding system. (Each fleet and rank divided by five and mixed up, so that the senior guys are senior only within their group which changes position each month. Even the most junior guy within his rank and fleet gets to be within the top 20% one out of 5 months.) The guys in the top 20% of overall seniority(including myself) get to share the crap flying every now and again.
Leave also gets sorted more equitably, if you got your school summer holiday leave this year, you may not get it next year. The guy at the bottom who has not had his leave choices granted last year or this will get it next year. etc
In my view the above goes a long way to fixing the problems with stricter seniority systems.
Problems with my current system:
No bidding between fleets unless they need you there ie. at their discretion.
So if one fleet expands significantly faster than the other, guys will get promoted out of seniority unless transition upgrades are allowed within your company.
If your aircraft is not as shiny as the others.... bad luck.
If your aircraft does not fly to your favorite destination... bad luck, go there on Holiday.
In my experience I have found the later system much more enjoyable overall. Less complaints, angst and envy among colleagues and a better lifestyle for the majority. The idea of not having to put up with twenty years of crap to enjoy my last few years of flying appeals to me.