A study was conducted to provide a scientific database about the prevalence, dynamics, and effectiveness of pay-for-knowledge plans. (Pay-for-knowledge is an innovative compensation system that bases salaries, not on particular job classifications, but rather on the repertoire of skills that an employee possesses.) A four-pronged research design was developed: (1) an extensive literature review; (2) interviews of a national probability sample of 154 corporate personnel officers; (3) a mail survey of 19 plants using pay-for-knowledge; and (4) analysis of employee attitudinal and behavioral data from three plants using pay-for-knowledge. The study found that pay-for-knowledge plans are in use in about 8 percent of major U.S. corporations, primarily in manufacturing industries. Although the plans vary widely, they are similar in terms of using pay-for-knowledge in conjunction with a team-based managerial approach, an emphasis on performance appraisals, skill rotation, the wage structure relative to local wage markets, and the kinds of employees covered. Among the major benefits of pay-for-knowledge are work force flexibility, employee development, and improved productivity, work force stability, employee attitudes and behaviors, and labor-management relationships. Some problems in logistics occur, with no effective ways yet developed to solve them. The study concluded that pay-for-knowledge plans will continue to be used and might become more widespread as more organizations learn about them. (Six-page reference list.) (KC)