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Why is skill-based pay relatively uncommon? Please explain!

Why is skill-based pay relatively uncommon? Please explain!

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Answer #1

There are indeed many reason why skill based pay is uncommon where one of the reason is increased labor cost with the increase in productivity and leading the net value to reduce. There can be inequity perception among the labour which doesn't motivate them to work or motivate them to leave the organisation. Also, it should be understood how the skill is affecting output on the whole and competition always suggests going rate in market wages all in all.

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