Skill-based pay is an alternative to job-based pay. It sets pay levels oil the basis of how many skills employees have or how many jobs they can do." Although most firms are not using skill-based pay organizationwide, an increasing number of firms are using it for some number of their employees." Specifically, jobs that require workers to work on different machines pay workers on the number of technical skill sets that they have. Expected positive outcomes of changing to the new model include increased quality, higher productivity, a more flexible workforce, improved morale, and decreased absenteeism and turnover. This is how it works. When a new skill is added to an existing job, the employee can earn a pay increase by mastering the new skill. Several methods for defining individual skills exist: direct observation of incumbents, testing, and measurable results. Instead of detailed job description, "person" and "skill block" descriptions are developed. Skill block descriptions are priced much as in job evaluation. To date, most skill-based pay systems focus on nonexempt manufacturing workers and others who engage in routine high-volume jobs. The more a job involves skills that are relatively easy to identify in terms of desired performance outcomes, the better the fit of the pay model." Skill-based pay, in reality, is difficult to design, does not fit all situations, and involves a time-consuming process of constructing skill blocks, mapping pay progressions, and assigning dollar values to each skill." It works best when built on a broad base of skills in a stable but expanding work environment." Its major advantage for employers is that it can be used to replace annual raises. Under the skill-based system, no one gets a raise, even when promoted, until he or she has demonstrated proficiency with new skills. Variations on the skill-based approach are used according to the type of skills required