Knowledge-Based Pay (KBP) is a compensation strategy where employees are rewarded based on their skills, expertise, and acquired knowledge rather than just their job title or tenure. Industries like manufacturing, retail, logistics, e-commerce, and facility management services (FMS) use KBP systems to encourage continuous learning, skill development, and workforce productivity. This approach helps businesses attract and retain top talent by offering competitive pay based on competencies and qualifications.

For companies managing contract workers, gig employees, apprentices, and blue-collar workforce, knowledge-based pay ensures fair compensation, enhances job performance, and motivates employees to upskill. By implementing structured pay scales linked to certifications, training, and experience, businesses can boost workforce efficiency, reduce turnover, and create a highly skilled labor force.