Why you get paid what you do

100 dollar bills in suitcase

Would you like to make more money than you do now?  Would you like to make the move to the next level but you haven’t been able to do so?    In order to do that, you have to understand typical employee expectations, typical employer expectations, and why you currently get paid the amount that you do.

Let me guess your expectations

You land that job you have been interviewing for and you are eager to get started.  They offer you a salary that, while you would like to earn more, it is high enough for you to take the position.  You work hard at you job to complete everything that you are assigned.  Fast forward a few years.  You are annoyed at your job.

You have been working here for some time and all you have ever received is cost of living increases.  You are good at your job.  You get everything done that you need to, you don’t miss too many days, sometimes you even skip your vacation so that you can show your employer that you are dedicated.  You are worth more than you are being paid and if they would only promote you, you could show them.

Reality check

Your employer has filled a position and are happy about it.  The HR department now hands off the new employee to the manager and goes about its business recruiting and hiring others into other positions.  They are happy because they were able to bag the new employee on the low end of their acceptable starting pay range.  That will make them look good and the employee can live in that acceptable range for quite some time if they prove to be an average worker.

Your manager is happy because now she does not have to do her job and yours, though she would be happy to continue to do so if they added the salary to hers.  She knows the job, and has done it.  That position is worth $X/year.  There is a minimum level of work that the new employee needs to perform to keep his job but it would be nice if they went above and beyond and made her job easier.

The company as a whole views the new position as worth a certain dollar amount.  Notice in this section that nothing is mentioned about the value or worth of the new employee, just the position.  This is a very important concept to understand.

How pay usually works

In the US, people are typically paid right around the perceived value that they provide to their employer.  The first part of that perception is the position, the job, itself.  Not only is it the first characteristic thought of, it is also the last.  That is why a CEO makes more than a janitor.  He or she is creating a larger amount of value through the management of all employees than that one person cleaning the one office.  The key word here is ‘perceived.’

Think of it this way, would you pay $20 for a gallon of milk?  No.  Why?  You don’t think a gallon of milk is worth $20.  You don’t have anything against that specific gallon of milk, it didn’t do anything to you (I hope).  It is just that milk is only worth so much to you.  That is how your employer views your job.  The position.  Not you.

When you perform your job, even when you do it well, you are earning the value that they assessed your position at from the very beginning (plus cost of living in some companies).  It has nothing to do with you.

The great thing about this concept is that you only have to know how to change how you are perceived, which is less daunting than it may sound.  We’ll take a look at that in another article but for now, just know that you are paid based on the perceived value that you are providing, and that most of that perception comes from the job itself.  Not you.

Be exceptional,



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