No matter what you do for a living—whether you’re a salesperson, a business owner, a self-employed professional, or an office worker—chances are the paychecks for people performing the same job functions as you vary greatly. Some people are earning a lot, while others are just barely scraping by. Even though you may be in the same market or industry and doing the same day-to-day things, your outcomes are very different.
Why is there such an earnings discrepancy among people in the same or similar job category? Because those who always emerge as the top performers know how to use the Law of Compensation to their benefit.
According to the Law of Compensation, there are no coincidences or circumstances as to why some people earn more than others. In other words, even though you’ll likely hear people say such things as, “He sells more because he has a better market than me,” or “The downturn in the economy has hit my industry much harder than others,” or “Of course she’s paid more…she’s the boss’s niece,” those external circumstances have little to do with a person’s earnings.
The Law of Compensation is a physical law and will always work; however, to have it work for your advantage you have to understand the elements involved. According to the Law of Compensation, the amount of money you earn will always be in exact ratio to the following five things:
1 The Need for What You Do
In order for you to be successful, there has to be a market for what you do—the product you sell or the service you offer. If you’re an employee or salesperson in a company, this point is taken care of for you. As long as the company you work for is viable and has hired you for a certain position, then there’s a need for what you do.
If you’re a business owner or self-employed professional, you’ll have to do some research to determine if there’s a market for your offering. Find out if anyone else is offering the same product or service as you. If yes, how much competition is there? Even if the marketplace seems saturated, you may be able to set yourself apart (see point #2). If no one else is doing what you do, why not? Have many people before you tried and failed? Or are you the first in your market to come up with the idea? Whatever the situation, get a clear picture of whether the marketplace can sustain you.
2 Your Ability to Do Your Job
Each day you must wake up and ask yourself key questions:
- How can I do my job with excellence?
- How can I best use my resources to excel?
- How can I be an expert by targeting a certain demographic?
- How can I improve given the circumstances I have?
Many people focus on the challenges they face rather than on the possibilities that exist. As such, they look at their job and how they should be compensated backwards. For example, they may say to their boss, “Give me more money (or a company car or stock options or better health benefits) and I’ll do a better job.” But such a mindset is the equivalent of saying to your fireplace “Give me heat and I’ll give you wood.”
The Law of Compensation states that you need to start with what you offer and then the money will come. Therefore, always focus on how you can do your job better, how you can be different, how you can improve, and how you can turn challenges into opportunities for yourself and your company. The more you keep your focus on serving and improving, the more money you’ll earn.
3 How Easy or Difficult You are to Replace
Your monetary worth is always in direct proportion to how easy it is to replace you. So if you’re easy to replace, then your monetary worth is low. But if you are the best one at your job and giving good service to your customers, then you are extremely valuable.
To raise your worth and thereby your earnings, always do more than what is expected from you. Too many people rely on the old phrase, “That’s not my job.” But going the extra mile and doing those things that aren’t in your job description will help you stand out and get the recognition that leads to more money. Realize that a lot of new opportunities started with someone seeing a need in a certain area and filling it. In the end, if you are the person who always volunteers and takes on new responsibilities willingly, people will remember you and you’ll be the first in line for new business, bonuses, promotions, and raises.
4 Your Attitude
A person’s attitude at work is often more important than his or her skill set. The way someone views the world and handles challenges definitely impacts his or her bottom line. For example, someone who complains all the time about not being paid enough, how tough the economy is, and how mean or unthankful all the customers are is not going to be viewed as favorably as someone who is proactive about solving problems and dedicated to customer service. As the old saying goes, “Where attention goes, energy flows.” In other words, the things you spend your time thinking about will multiply. What do you continually think about at work—the problems, the unfairness, your low pay check? Or do you think about rendering great service, finding solutions, and creating opportunities?
Instead of competing with everyone else and trying to look outside reasons for your lack of success, focus on your own ability to do your work. Be honest with yourself. A lot of people who think they’re earning too little are not really giving their full attention to their work and are displaying a poor attitude on the job. With a positive attitude, you become a happier person at work. And when you’re happier and focusing on how you can do better and improve service rather than hanging out around the water cooler complaining about a myriad of things, you will stand out as someone who deserves more money.
5 Your Belief in the Law of Compensation
To make the Law of Compensation work for you, you must believe in it and trust that it works. Granted, it might take some time until you see noticeable results. After all, this isn’t something you can start on Monday and expect significant results by Friday. You need a long-term focus to get the best benefit. Therefore, believe that you deserve more money and acknowledge that there is an indisputable law to your earnings success. Doing so will help you keep your perspective and strive to always do better on the job.
Success is Predictable
If you are not earning what you want, you need to take a good hard look at yourself and your on-the-job behaviors and actions. Are you following the Law of Compensation guidelines? Or are you just skating by, hoping that by some stroke of luck you’ll earn more? Remember that luck has nothing to do with your salary. When you follow the Law of Compensation principles and believe in yourself, your current salary will rise and your future income potential will be limitless.
Published widely in print magazines