What is the name for a pay system linked to the depth of skills acquired by an employee?

The term that describes a pay system linked to the depth of skills acquired by an employee is "Skill-based Pay." This approach compensates employees based on the skills and competencies they possess and can apply in their job roles, rather than solely on their job title or the responsibilities of a specific position.

Skill-based pay encourages employees to develop and enhance their skill sets, leading to a more versatile workforce. By rewarding the acquisition of skills, organizations can promote continuous learning and adaptation, which can be particularly beneficial in rapidly changing industries. This pay structure emphasizes the value of individual growth and contribution to the organization, fostering a more engaged and capable workforce.

In contrast, performance-based pay focuses on rewarding employees for their work output and specific achievements rather than their skill levels. Incentive pay is typically tied to meeting certain organizational goals or objectives, while commission pay is often associated with sales performance. Each of these alternatives addresses different aspects of compensation unrelated to the depth of skills specifically acquired by employees.