Final answer:
A system where pay increases come with certification of new abilities is known as a skill-based system. It is part of the merit-based selection in employment practices.
Step-by-step explanation:
A system where pay increases come with certification of new abilities is known as a skill-based system. This type of system provides financial incentives for employees to learn new skills or earn certifications that directly translate into their work performance and efficiency. It's a part of merit-based selection, where employees are evaluated and compensated based on their abilities and qualifications. This contrasts with the traditional job-based system, where pay is typically associated with the position held rather than the specific skills of the individual. Credentialism, which emphasizes the importance of certificates or degrees, can also play a role in skill-based systems to a certain extent. However, the focus is on practical, demonstrable skills rather than solely educational credentials.