Skill-based pay is commonly associated with what employment concept?

Skill-based pay is closely tied to linking compensation to specific competencies acquired by employees. This method emphasizes rewarding employees for their skills and knowledge rather than the job title or responsibilities alone. In a skill-based pay system, workers are compensated based on their acquired skills and abilities, which encourages continuous learning and development.

This approach can benefit organizations by promoting a more skilled workforce and increasing overall productivity, as employees are motivated to enhance their competencies to earn higher wages. By recognizing and financially rewarding the development of specific skills, employers can align their workforce capabilities with organizational goals, improving both employee satisfaction and performance.