It doesn't really "work" persay. It's just a number proving your worth on these forums. However, you'll notice that people with the most to say usually don't have the highest number since people give negative karma whenever they disagree with you, which isn't the point behind it.
Anyway, you can give it out once you have 10 posts at a rate of 10 karma points, be them negative or positive, per 24 hour period.