When employees are paid according to the skills and knowledge they have rather than the specific jobs they perform,they are paid according to skill-based compensation.

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Skill-based compensation is a pay system where employees are compensated based on their skills, knowledge, and abilities rather than the specific job they perform. This allows employees to be paid fairly based on their value to the organization, irrespective of their job title or position.

When Employees Are Paid According to the Skills and Knowledge