Are you worth what you are being paid?

Many people think if they just put in more time, they are worth more in terms of dollars & hence should be paid more money. Nothing could be further from the truth! Have you ever known a coworker who “worked” at the organization you worked for, put in a similar number of hours but got so much less done than YOU did... AND got paid the same as you?  I think we all have known such Cretins.  

When it was time for increments and promotions, they complained that they didn’t get any OR if they somehow got one, the rest of the workers thought, “That lazy person gets the same increment/raise/bonus as me, why should I work so hard?”  

Have you ever known someone who put in really long hours but didn’t get any more done than someone putting in fewer hours? Again, I think we all have known such a worker; yet, if you asked that person what they were worth, they undoubtedly would say, “I’m worth more because I put in more hours.”  

In reality, we should be compensated for the value we bring to our jobs & careers, NOT the time we put into the job.  

The tea lady works all day. Should she get as much as the Managing Director? The cleaners clean the toilets and hallways all day, should they get as much as the head of HR? The street sweeper works through the heat of the afternoon in the sun or rain, should they be paid as much as the entrepreneur who employs 1000 people?

To help us understand this concept, we need to look at a VALUE BASED or Merit Pay compensation system. If I could have my druthers, everyone on the planet would be paid on straight commission; getting paid exactly for what they produce.

Let’s start with sales, the easiest work to set up on a value based system. If you sell more, you get paid more. Sell less, you get paid less. Most sales organisations start with a “living wage” that each worker gets just for accepting the job. It’s minimal and designed to help a new sales rep get started as they begin making their sales, some of which may take weeks, months or in multimillion dollar sales, years to close. It allows them to feed their kids and put fuel in their car and not a lot more. Sell and you make money. Don’t sell, and in 6 months, you are on the street looking for a new job. Very fair.

Looking at production, service personnel and professional services, it’s easy to set up something based upon productivity, billable hours or piece-work. The more chips you stamp, the more beds you make, the more trees you trim, the more windows you install, the more parts you make, the more client hours you bill, the better you are compensated. Again, very fair.

Where it gets a bit “sticky” is in “support systems.” How do you set up compensation systems for finance, for HR or for non “quantitative” departments? Reality, it isn’t a lot different. As I share in my seminars, “If you can quantify it, it can be measured. If it can be measured, it can be used to differentiate.”

If you can take on two projects while the other people in your department can only take on one and your success and quality is equal or better, shouldn’t you be compensated twice as much? I’d say “YES!”

Likewise, if someone can handle 10 internal clients calls with a satisfaction score of 9 on a 1 – 10 scale while the other people on the team can only handle 8 client calls with the same satisfaction score (based upon internal client surveys), shouldn't that person be given 20% more money? I'd ask, “Why not!?!”

Most corporate and almost all governmental compensation systems are set up on archaic systems that figure if you are doing the same job, you should get the same pay which they deem as 'fair'. This begs the question, do people doing the same job, really do the same job? Rarely if EVER have we found 2 people doing the same job were even remotely close in overall productivity.  

This begs the question, do people doing the same job, really do the same job? 

A good friend was a software engineer for a defence contractor in the USA. He worked SLOWER than everyone else, but when he ran is software, it almost always worked right the first time. Over the long run, he was so much more efficient than his counterparts. They’d rush to impress management and then spend countless hours “debugging” their programmes.  

One manager this friend had let him leave during the day to go to the gym and workout or go for a walk around the lake to clear his mind. Usually, in the middle of the walk, he got his inspiration and would jot down the formula that would allow his top secret torpedo to hit it’s mark every time.  

His next manager thought he was wasting time by leaving the office and would not let him go outside the building and as a result, it took him 2/3 longer to get the same results. Which of the two managers focused on productivity VS hours at a desk?

If we start paying people for what they produce, we no longer have to waste management time and potential looking over people’s shoulders to see if they are doing their jobs correctly. Instead, we mainly concern ourselves with the results. Is that fair? (YES, we have to train and develop people. Some absorb it all. Others, listen but ignore.)

Having been self employed for 37 years, we see a ton of people every year coming into our profession as “consultants, trainers or motivational speakers” and within one to three years, we see them LEAVE. The lure of what they perceived as “easy money”, “low stress” and “high prestige” turned out to be hard work, HIGHER stress and not a lot of prestige... when they can't pay their bills. Being self-employed without the skills to market one's self, not possessing the requisite platform skills or the deep subject knowledge developed over a lifetime makes it difficult to sustain an ongoing business. They can fool enough people... once, with their awesome 5-minute video carved from the best scenes of 50 hours of recordings, their platform results rarely get them repeat business. So they leave the business. Often those who hired them lose their jobs as well. Fair?

Whether your company does or does not pay according to what you are worth, the point is still very relevant to how true professionals advance their careers. It goes back to the original question, “Are you worth what you are being paid?” How do you and your organisation value your time and your work? How do you ensure you are worth more tomorrow than you are worth today? 

How do you ensure you are worth more tomorrow than you are worth today? 

Here are 6 questions to get you thinking of how you stack up against your “competition.” Don't read this if you are offended by merit pay.

Question 1: What is a 5-year-old computer worth? Answer, About 10% or less of its original value.  If you are not growing dramatically every year, what will you be worth in 5 years? The technological knowledge and past assumptions in healthcare and world paradigms you graduated with may only be worth 10% of what it was worth 5 years earlier.

Question 2: What have you learned in the past YEAR that makes you more valuable to your organization? (Or have you just been putting in more time?)

Question 3: What skills have you developed that few people possess that are essential to your organization? (If you can’t think of anything, you should be thankful you have not gotten sacked.)

Question 4: Do you answer requests for overtime positively? If positively, you may deserve more. If not positively, we might commend you for loyalty to family and a balanced lifestyle. But is that an asset to the organization? Perhaps be happy where you are at and spend more time with your family. Just don’t expect the organization to pay for your improved family life. (Yes, there are organisations who see this as an asset and will compensate you for 'balance'. Seek one of them out.)

Question 5: Will you take on any challenge, a new overseas posting or job assignment? If so, you should be on a fast track for increments and promotions! If not, maybe be happy with what you are getting.

Question 6: Have you risen beyond your job description in the past year and volunteered to help other departments, give suggestions for procedural improvements and taken risks at meetings to offer an unpopular but necessary viewpoint? If so, you could be one of your organisations most PRICELESS assets. If not, you are in the ‘average pot’ and should expect to receive average compensation, as is only fair.

If you are in the ‘average pot’ , you should expect to receive average compensation.

If this article seems reasonable to you, you probably are in the top 1/3 of your organization in terms of productivity. If it makes you a bit nervous and maybe you disagree with one or two points, you are probably in the middle 1/3rd. If it angers you, sorry, you are probably in the bottom 1/3.  

No one and no organization owes anyone a better living in this world. In any capitalistic society, we are owed and deserve only what we produce in life. If you want the same as everyone else, see if you can get into a communist country with a socialist economy. If you are in a free market, capitalistic society, we are required to make a difference in this world.  

Michael Podolinsky CSP, Global Speaking Fellow is Asia’s Productivity Guru. He’s spoken in 37 countries on 7 continents and authored 16 books & audio books on productivity. We help people and teams boost productivity, grow their businesses and do more in fewer hours.

Michael's Website: www.MichaelPodolinsky.com has more information. Feel free to email him at [email protected]