Please explain what this "merit" is that you speak of and how it would be applied fairly to a large pilot body. As far as i've seen seniority still is the fairest way of sorting out issues in the pilot body to date such as command & base bidding and retrenchment. If a pilot underperforms to the extent it is a problem he is removed from the company either by failure of a line check/sim or disciplinary action. Merit based systems are open to far more corruption as an individual is usually responsible for selection and performance based results can be biased to favour certain outcomes. Under a merit system an underperformer can achieve a certain position and choose to surround himself with friends (good or bad).
Without seniority and given how companies don't seem to care much for experience these days the fact that a 10 year pilot is paid 10-15% more than a first year might mean they are targeted for cost cutting etc...fine if your a new junior pilot with ambition for the short term but in the long term it will repeat every time the company gets top heavy.