Answer
$K'=\frac{1}{2}K$
Work Step by Step
According to the work-energy relation, work is equal to the change in kinetic energy. In this case, work done by gravity is equal to kinetic energy. $$mgh=K$$ If $h'=h/2$, the new kinetic energy becomes $$K'=mgh'=mg(\frac{h}{2})=\frac{1}{2}mgh=\frac{1}{2}K$$
