Does pay for knowledge really deliver? A research study produces inconclusive results.In the search for more effective compensation systems, a number of companies are experimenting with &dquo;pay for knowledge&dquo; (PFK). Under this system, employees are paid on the basis of the inventory of skills they have to offer, rather than for any particular job performed. Advocates argue that this system can increase worker productivity and product quality and decrease turnover, absenteeism, and accident rates.However, there is little quantitative evidence to support these claims. In this article we report on a study that was specifically designed to test PFK claims. The study compares various outcomes between two similar manufacturing plants belonging to one company, one with a pay-for-knowledge system and one without, over a ten-month period. The study found higher quality as well as lower absenteeism rates and fewer accidents at the PFK plant, as PFK advocates have predicted. In contrast, productivity was higher at the non-PFK facility. However, the findings may have been influenced by gender differences-the PFK plant's workforce was predom-inantly male, the non-PFK predominantly female ; and plant age-the non-PFK facility was less than two years old, the PFK six years old.
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