Geeks With Blogs

image Today’s article is going to be controversial.  As well, I wasn’t able to find sources to substantiate the content of the article, so it is largely supposition based upon my personal experience.  What’s worse is that it’ll likely be pretty short and not my typical diatribe of pros and poetry.  I’m going to talk about getting paid less than what you’re worth and why that is actually a good thing.

During the past twenty years I have worked for several software companies with countless technical types.  Seems like there is always someone complaining that they don’t make as much money as their friends, or their colleagues, or that they’re not getting paid what they feel like they’re worth.  I’ve heard many times statements like:

“I was hired well below what I should be making…”

“Based upon research that I conducted on, I’m not even making the median salary…”

“My friends are making more than me and we’re doing basically the same stuff…”

“I’m buying a house and …”

“My wife is having a baby and …”

“I’d like to buy a new car and …”

“I don’t have enough money to support my crack habit and …”

You’ll find countless references on the net regarding how to command higher salaries.  eHow, for example, has several articles explaining how to negotiate higher salaries.  (see How to Negotiate a Higher Salary, How to Negotiate an Even Higher Salary, How to Negotiate Salary After Job Offer)  One colleague of mine went so far as to reduce the number of hours he worked per week to effectively give himself a raise that he thought he deserved.  Whether or not he deserved the raise is not important.  As well, whether or not you’re getting paid what you’re worth is not important either.

I can hear the bits and bytes screaming at me as you’re now pounding on your keyboard, beating on your chest, and scoffing at me with discontent.  Stick with me here and I’ll explain why getting paid what you’re worth is not important (and not smart for that matter.)  First of all, if you’re an outstanding employee, like you should be, there is no way for your employer to pay you what you’re worth – it costs too much.  Second of all, you don’t want to be paid what you’re worth, because people who are paid what they’re worth are expendable.

You become expendable as your compensation rises to meet your worth because…wait for it……you are making yourself less valuable to the people who are purchasing your mad skills.  When you’re working for someone else, you are selling them your worth.  Your worth minus your salary and benefits is your value to the organization.  When your value becomes close to or less than the cost of replacement, you simply aren’t valuable any more, and you’re likely to be replaced (or scrutinized, or hated, or made fun of, or talked about, clubbed, or whatever.)  The point is…having zero value is not a good situation for you to be in.

A key performance indicator for many companies is revenue per associate.  This is a number that you should know for both your company and your industry.  If your total compensation is close to or above this number, then it’s possible that you have diminished value or perceived diminished value.  As your compensation grows, you’d better make sure that your contribution grows, positively impacting your company’s revenue per associate indicator, and that your contribution is visible to upper management.  Doing so keeps your worth out ahead of your compensation, thus preserving your value.

So, stop whining about not getting paid what you’re worth, figure out how much value you bring to your organization, and then negotiate your compensation based upon your value.  Concentrate on being fairly compensated and happy, rather than overcompensated, negative, and miserable.

Posted on Wednesday, October 21, 2009 1:11 AM Musings | Back to top

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