Skill-Based Pay Definition
This is a system of compensation that rewards people for displaying a level of mastery for skills rather than time on the job or having a generic degree.
Most of the time, skills-based payment systems are suitable for specialized trades in which employees must master certain work-related skills in order to advance in rank and pay scale. This mastery is determined through various certifications, specific degrees, and/or employer-based tests designed to ascertain specific skills and knowledge.
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Are Skill-Based Pay Systems Better Than Standardized Pay Systems?