Seeking to restrain costs while improving the quality of results it provides, "human-powered search" provider ChaCha has cut the standard pay rate of its online "guides" and shifted to a performance-based compensation system.

ChaCha CEO Brad Bostic confirmed the move in a phone interview with InformationWeek. "We've introduced a new incentive-based guide compensation model, so that we can reward our best performers and provide the others something to shoot for," he said.

Unlike automated search engines like Google, ChaCha, which launched in September 2006, uses an army of human "guides" to seek out answers to search queries. Bostic said there are close to 20,000 certified and trained guides, with "thousands more" coming on board every month. The guides can log on to answer questions whenever and from wherever they choose. The company, which has landed around $16 million in venture funding, is concentrating on mobile search, allowing people to use their cell phones to answer questions via either voice calls or text messages.

In January, ChaCha launched its mobile answers text service.

"We're generally doubling both queries and users every month, and we're now in the tens of millions of mobile answers per month," Bostic said.

ChaCha also plans to roll out a concierge-type assistant service. Users with a registered credit card will be able to use the service to call or text message and ask for tickets to be purchased, reservations to be made, or other services. Bostic said those services will be phased in over the next year.

Under the new payment system, premium guides who meet certain performance criteria in terms of accuracy and volume will receive 20 cents per answer; lesser performers will get 10 cents.

Not all the ChaCha guides are thrilled with the new compensation model, though. A discussion forum on the "My Total Money Makeover" Web site devoted to ChaCha was full of disgruntled guides yesterday who'd just found out in e-mail about the new plan.

"I just got an e-mail from ChaCha that they will be using 'pay-for-performance,' " commented one unhappy guide. "In other words, if you keep the volume up, you will get the usual 20 cents; however if you just infrequently log on to answer questions, you will only get 10 cents. Not worth it for me. [Twenty] was bad enough."

"I did the math and figured out that it takes 500 answers to earn $100 at $.20 each," noted another commenter. "At 3 minutes a question, that's 20 questions an hour, it would take 25 hours to earn $100! That's ridiculous!"

Bostic counters that the best guides can earn around $8 an hour. And many of the guides answer questions for nonmonetary reasons, he contended.

"Money is not the primary motivator for our best guides," he said. "It's being part of a knowledge-sharing community that's only available to those who become guides."

It seems he's about to test that theory.