Why don't they have a system which promotes on performance and experience, rather than just who's been there the longest?
Seniority does. You still need to make the standard (performance) and have the requirements (experience).
Have you ever raised your eyebrows at some of the appointments made to 'merit based' pilot positions such as C&T etc? Notice how merit based sometimes seems to coincide with attributes such as 'mates of the CP', and 'yes men' etc.
What would provide the transparent measure of performance and experience (relevant)?
Seniority is a curse for those inside and outside of it, but it beats the non-existant alternative when it comes to fairness and transparency.