At one end of the scale you have seniority, at the other you have nepotism. Somewhere in the middle you have a meritocracy.
If for example you have 10 go for say 5 upgrade positions and all 10 day make the grade, then seniority is as good as way to order ascension as any.
Rotten industry? Maybe, or maybe just a byproduct of a rotten society.....