Due to the effect of human resource on knowledge management, this research is intended to explain the effect of motivating systems such as salary and wage on promoting employees’ knowledge and competence. Accordingly, the plan of constant increase in payment is regarded as a great change in traditional payment plans. According to the certain performance in the existing fields, this plan can be employed to provide enough salary for government employees by considering three factors: traditions, knowledge, and competence. Payment on the basis of knowledge and competence, compared to tradition, is more common in knowledge oriented organizations. The theoretical and practical bases of this approach are explained in this article. The condition for the establishment, the way to design, and making use of payment according to knowledge are presented and analyzed in the models. In order to adapt the model with the real situation, the knowledge based salary design was put into practice in a manufacturing factory. The results indicated that having an appropriate model for payment, among other necessary elements of knowledge management, is the main key for creation, collection, dissemination, and sharing of knowledge aiming at promotion of employees’ learning and performance
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