The phrase represents the idea of a wage or wage that’s “decided on expertise,” or extra formally, “depending on expertise.” It signifies that the compensation supplied for a place just isn’t fastened however fairly adjusts primarily based on the candidate’s {qualifications}, abilities, and the variety of years they’ve labored in a related discipline. For example, a job commercial would possibly state the function presents a wage vary, and that the ultimate quantity inside that vary supplied to a candidate will hinge on their demonstrated experience.
This sort of compensation mannequin permits employers to draw a wider pool of expertise by interesting to each entry-level and seasoned professionals. It acknowledges that people with extra intensive expertise convey larger worth to a corporation and compensates them accordingly. The observe may also encourage workers to repeatedly develop their abilities and acquire further expertise, probably resulting in larger earnings over time. Traditionally, this technique of wage willpower turned extra widespread as companies sought to distinguish compensation primarily based on particular person contributions and experience ranges fairly than relying solely on standardized pay scales.