Saw the tagline, “Same job for 5 years no raise, living the dream…” on Twitter the other day, and I liked it. The line got me thinking about value—both for oneself and others. Now I’m not trying to embarrass anybody by pulling out this tagline, but I think we all can reflect on, and maybe even learn from, the reality that this statement embodies.
I am intrigued by how many people just do not understand the concept of value, particularly the measure of value, which is one of the five functions of money. What something is worth to another person depends on how much they need it (demand), and how easily one can attain that same thing elsewhere (supply). If the item—and this can be an employee performing a certain task, duty or service—is readily available without much difference between sources, then its value will not be very high. If something is specialized, or harder to get, and people need or want that thing, then the value for that item or person providing it will be high. Now obviously economics becomes more complicated as we consider things like minimum wage, regulation and other factors, but in the general sense, monetary compensation is determined by worth to others.
So how does this apply to individuals or businesses? Well on the side of business, perceived value is set in the pricing of goods or services. Again in a general sense, the market will tell a business if the prices it has set really reflect its worth. I say “in general” because other factors, of course, are involved in whether a company is profitable or not—things like marketing, understanding one’s demographics or niche, overhead costs, and so forth—which ultimately will determine the life or death of that business. So in the big picture a company has to be valuable in terms of goods, services and price to the people and communities it serves.
For individuals, two types of worth are important to consider: self-worth (how valuable you are to yourself) and worth to others. Self-worth is important because it determines how we think of ourselves, the goals we set, the risks we take, and ultimately how big we allow ourselves to dream. Low self-worth individuals keep themselves thinking and playing small, they allow others to walk all over them, and they allow fear (based on not feeling worthy enough) to guide their actions, and thus govern what they receive in life.
Many of us have had low self-worth at some point in our lives. And many of us have also changed those patterns of belief within ourselves, and have thus gotten to experience the profound transformations that occur as a result of doing so. You may wonder how self-worth is truly and permanently changed in individuals, but this I will have to save for another post.* Just suffice it to say that it can be changed by anyone.
The other type of value is one’s worth to others. What do you provide for the world; what do you provide for others? Do you do something that makes other peoples’ lives easier? Have you created something—a tool perhaps (an app, software, process, etc.)? Do you make beautiful things? Do you make people look or feel beautiful? Do you do specialized work, like adjust the spine, clean pools, build things, or something that takes skill and know-how? Do you have special knowledge—of the law, of the human body, of metaphysics, of connecting to God? What do you do that other people can benefit from? And within your area of expertise, what makes you different from the others that do similar work? Aha! And this final question is what brings us back to square one.
You see, in the real world, what makes you special (self and other worth) is the most important factor in determining how much money you make. People are only going to pay you if you provide them with something they value. I remember a young street girl in Berkeley where I was a university student asking me for money one day; when I refused, she offered to recite a poem for a price. Now while I’m sure that she was a uniquely talented artist, her offer simply held no value for me. Had she offered to teach me physics or write a paper for me, on the other hand, I might have considered it…but clearly her solicitation was not considering the concept of value in an exchange.
The same holds true in any monetary exchange including employment. If you work for a company and you do nothing to increase your value to them, then the chances that you will get a pay increase are pretty slim. Time served is simply not enough. Employees don’t always understand that laws prevent companies from just dumping people that don’t stand out, but you can probably bet (now that you are reading this) that your failure to get a pay raise is a direct reflection of your value to the company. It means that your work isn’t very much different from that of your peers; and it probably also means that the company believes if you were to leave—on your own volition, of course—that they probably couldn’t do any worse with somebody else, and they might even do better. That’s value connected to supply and demand!
So how can you get a pay increase? You must demonstrate value to the person or company employing you, and that value has to be above and beyond what your competitors (peers) are offering. You first must be crystal clear on what that person or company values. This is where many people fail. They think that it should be something like time served, or a winning personality, or something else that likely only has value to them. But please understand that companies exist to earn profit. This is not an evil thing. Companies also provide goods and services, yes, and thus they provide a value to the world; but in the end: no profit = no company. And no company means every person working for that company is now unemployed. You see, it’s easy to vilify business in its quest for profits, but in the end many lives are connected to the life or death of a company, so considering the big picture is more realistic than what many do when evaluating the ethics of capitalism.
Here’s the bottom line: You want a pay raise—you need to show that business how you will help them be more profitable, period.
If you can’t show a company how you will help them be profitable, then why would they value you above the average employee? Oh you think you are entitled to it over time…not if the company is not hugely successful you’re not. Yes if a company explodes—like Google, Facebook, or the government—then you’ll get a pay increase just for being on the team. But that’s not 99% of businesses: Profitability and extreme profitability are not the same, so if you aren’t showing your value to the company—how you individually and uniquely help that company be profitable—then you can hold your breath for your ten-year gold Rolex, because you probably aren’t going to get much of a pay hike unless the entire market goes upward. But if you can show your employer (clients) how what you do is valuable for them, and how if you were to no longer do it they might actually be less profitable and maybe even lose money (time, health, their freedom, etc), then you will be of utmost value to them, and I promise you, any smart company will pay for that.
*If you would love to know how to increase your self-worth your worth to others, and thus your financial worth, I am available for consultations: contact email@example.com