Final answer:
A pay structure that compensates employees based on the skills and knowledge they acquire is known as skill-based pay, which promotes continuous learning and adaptability in the workforce.
Step-by-step explanation:
A pay structure in which employees are paid based on the working knowledge they acquire is known as skill-based pay. This approach to compensation focuses on the skills and knowledge employees possess rather than the specific job they are performing. Employers who adopt a skill-based pay system believe that it encourages continuous learning and development, making the workforce more flexible and capable of adapting to new technologies and processes. Notably, this pay system aligns with the value placed on having transferable skills, where employees' knowledge and education can be applied in a variety of settings.