Final answer:
Daniel increased his salary by earning a master's degree in education, which is an example of pay for knowledge or skill-based pay so, the correct option is (a). This compensation system rewards the acquisition of additional skills relevant to the job and reflects the societal value placed on educational attainment and specialized skills.
Step-by-step explanation:
Daniel, a sixth-grade teacher, increased his salary by obtaining a master's degree in education. This rise in income is an example of pay for knowledge or skill-based pay. Skill-based pay systems are designed to reward employees for the acquisition of additional knowledge or skills that are directly applicable to their jobs. This contrasts with other compensation systems like pay for performance or gainsharing, which are tied to the output or profitability of the company, and bonuses which are usually one-time rewards for achieving specific targets.
The concept of skill-based pay is grounded in the idea that employees who invest in their education and skill development contribute more effectively to their organization's goals. According to data from the U.S. Census, individuals with a college degree earned significantly more than those with only a high school diploma, illustrating the financial benefits of higher education. This is supported by the winner-take-all labor market theory, which suggests that the salary gap between various tiers of employees is becoming less about the actual educational differences and more about the value attached to certain roles or the scarcity of particular skills.
Davis and Moore's theory also plays a role here, emphasizing that societies reward occupations with higher pay to motivate individuals to invest in the education and training needed for these important roles. The situation presented with Daniel echoes this theory, as by gaining higher qualifications, he has made himself eligible to earn a higher salary, thereby reflecting the broader societal valuation of educational attainment.
While skill-based pay can be advantageous, it's essential to recognize the broader social implications. The increasing requirement for post-secondary education for most jobs contributes to the rising income inequality being observed, as high school diplomas lose their previous value in the job market.