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Best to Get Paid Less Than You're Worth

marting

Illuminator
Joined
Sep 18, 2003
Messages
4,212
I've always found the notion odd that a business should "pay you what you are worth."

I mean really. Why would a company pay you what you are worth when they can just not have you and they haven't lost a thing?

There are three possibilities.

1. You are paid more than you are worth.
2. You are paid exactly what you are worth.
3. You are paid less than you are worth.

I submit that #3 is almost always the case. Further, it's the most desirable case as an employee. Those in category #3 are far less likely to be let go and will be valued more.

To the degree your boss/business sees you are costing less than your added value to the biz, you have leverage and so more flexibility in how you go about work.

You have the best chance of finding ways to increase your value to the employer. And you are better at that because you know your strengths better than anyone else. And increasing your value is the best way to get good raises.

Worked for me. I never asked for a raise and got very good ones.
 
smart move would be to reject the raise because it brings you closer to being paid what you're worth, and thus putting you in an even better position for rejecting even bigger future raises
 
As long as it's not a lot less than what you're worth I suppose.


A business would not be profitable if all employees were paid exactly as much as they brought in. That seems to be tautologically true.
 
I’m currently paid more than I am worth and I rather enjoy it. I plan on being laid off soon, so it is good to get as much in the bank as possible before being retired.
 
As long as it's not a lot less than what you're worth I suppose.


A business would not be profitable if all employees were paid exactly as much as they brought in. That seems to be tautologically true.

What you are worth and what you bring in are not the same thing. If level 3 widget makers are worth 100 squids a moonwink then that is what you are worth. It is up to the employer to make a profit on that.
 
smart move would be to reject the raise because it brings you closer to being paid what you're worth, and thus putting you in an even better position for rejecting even bigger future raises

Even better, when they offer you a raise, you insist upon a pay cut! Eventually you'll be working for nothing, but you'll never get let go!
 
It's a silly idea that it's possible to quantify what one worker "brings in".

100% wrong, sorry.

In sales, a rep will bring in quantifiable business that is very easy to measure.

In trades, the value of work is charged out, so they know exactly what it's worth.

Engineers likewise. Their hours are chargeable and measurable.

Checkout operators are measurable against each other and profit margins.

Office staff are somewhat more difficult, but even with accounting people, you know what the work will cost if you have to pay an independent to do it, so you can calculate what the value to the company is.

Pretty much every job is verifiable on value in some way.
 
Often though you will have multiple people involved in any given customer transaction. How do you apportion the relative contributions of the sales rep, the project manager, the individual team members who perform their respective functions, and intangible things like the office space and infrastructure that they all use, the location, the "brand value" or "goodwill" contributed by the company's brand itself, and so on.
 
Also, my work is worth far more when I do it as a part of a business than it is if I do it in my own. That is true for most professionals. The clients I worked with when I was a part of a national firm would not hire me when I left. It doesn’t make sense to engage hundreds of individual professionals when you can engage a few firms and get similar bandwidth with less transactional friction. And no one ever got fired for hiring a big firm to handle an important project, whether it was engineering, legal, or accounting.

So, my work that bills out at $750/hr at a big firm can only be billed out at $550/hr at a small firm and $400/hr as a solo practitioner. Or I could work in-house for a company and not track hours at all, which pays about $300/hr but much more regularly than solo work.

At a firm there is tons of overhead and profit that need to be taken out prior to paying the professional fungible billing unit. My ballpark was always that if I was billing at least 1800 hrs per year than I should get at least a third of my billings. Less than a third of billing less hours because the overhead is rather fixed.

So, that’s how I figure what I bring in. But what I’m worth is what someone else would pay me to work for them. Those are different values in my experience.
 
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Often though you will have multiple people involved in any given customer transaction. How do you apportion the relative contributions of the sales rep, the project manager, the individual team members who perform their respective functions, and intangible things like the office space and infrastructure that they all use, the location, the "brand value" or "goodwill" contributed by the company's brand itself, and so on.

Every business has overhead costs. Most factor them in and still come up with the income generated by individuals.

Sometimes it’s hard to calculate, but it is a fundamental business task to know precisely what income is generated by staff.
 
Impossible question. What are you worth, and to who, and when? What's an employee worth when he is screwing around on the ISF instead of working? It's never a question of what the worker is worth, it's a question of the employer getting what they want done and what it's worth to them, sliding around on a fluid efficiency/convenience metric.

The heat goes off in your house in the winter. Surely you would pay nearly anything to live in comfort and not have your pipes freeze and burst? But that doesn't mean that the worker who needs to make a quick minor repair is worth a thousand dollars per hour. His work is still a simple, cheap thing to do requiring minimal skill. So what's the repair "worth?

I hear executives and stuff justifying their exhorbitant salaries and bonuses this way. "I brought X amount of money in, therefore I am worth this disproportionate compensation, which is only a fraction". That's not valid; bringing the money in is your job. A amazon shipping worker doesn't get a chunk of Bezo's profit because he "makes it happen".

I argued with a lawyer about this once, the whole "value of service" thing. He said a lawyer can keep you out of jail or save you from losing your home/savings in a lawsuit or make you settlement cash, so their $300/hr is "worth it". He was unconvinced that if he was dead from exposure or starvation because of not being willing to pay a farmer or water treatment worker or carpenter a comparable rate, because... that's different.
 
You should always endeavour to be paid more than your worth, because your employer is always pushing hard in the other direction.
 
smart move would be to reject the raise because it brings you closer to being paid what you're worth, and thus putting you in an even better position for rejecting even bigger future raises

Maybe it's different in other industries, but in my field it's pretty typical for the raises you get for staying with an employer are far less than your pay increase if you went out and got a job with someone else.

Employers pay you what they think they need to pay to keep you. In that sense, you're getting paid exactly what you're worth. Often it's cheaper to keep a person, than to convince someone new to come on board. At least, that's how it seems in my industry. You pay a premium up front to attract new talent, and then pay them a pittance in raises to retain them. Whatever I'm getting paid now, it's probably a little lower than the market rate if I were to get hired into this role today.
 
TIL OP is a Fortune 500 corporate exec trying to convince us that working for less than we are worth means we will make more money.
 
I'm pretty sure nickel and dimeing western middle class knowledge worker and specialist trade payrolls is not what allows billionaires to exist. Or is even on their radar.

A broken economic system and misplaced aspirations are what allow billionaires to exist.
 
I've always found the notion odd that a business should "pay you what you are worth."

I mean really. Why would a company pay you what you are worth when they can just not have you and they haven't lost a thing?

There are three possibilities.

1. You are paid more than you are worth.
2. You are paid exactly what you are worth.
3. You are paid less than you are worth.

I submit that #3 is almost always the case. Further, it's the most desirable case as an employee. Those in category #3 are far less likely to be let go and will be valued more.

To the degree your boss/business sees you are costing less than your added value to the biz, you have leverage and so more flexibility in how you go about work.

You have the best chance of finding ways to increase your value to the employer. And you are better at that because you know your strengths better than anyone else. And increasing your value is the best way to get good raises.

Worked for me. I never asked for a raise and got very good ones.

You're just creating a race to the bottom. Your employer is paying the the least it takes to keep you, not how much you are "worth". And it doesn't matter how much money you leave on the table, your boss will play you off the second it makes financial sense.
 
You're just creating a race to the bottom. Your employer is paying the the least it takes to keep you, not how much you are "worth". And it doesn't matter how much money you leave on the table, your boss will play you off the second it makes financial sense.

For the most part people get paid enough so they don't quit, and work hard enough so they don't get fired.
 
You're just creating a race to the bottom. Your employer is paying the the least it takes to keep you, not how much you are "worth". And it doesn't matter how much money you leave on the table, your boss will play you off the second it makes financial sense.

Race to the bottom? From 1971 to 1976 my pay jumped frequently even though I never asked for a raise. It was 2.5X higher in 1974. Inflation cut into about a quarter of that but the rest I pocketed.

I left for another company in 1976 because the owner was afraid of microprocessors in designs and I really wanted to use them. My new job, where I used a Z80 in a product, was at only a slightly higher pay. However, similar increases occurred there over time.

At both companies I sometimes went against the instructions of my boss to produce what I believed were better and cheaper designs. Worked out quite well. For both me and the companies.

Yep, I really raced to the bottom.
 
In my experience the premise is wrong, I've known many highly overpaid individuals who were, unless the company as a whole failed, fireproof while essential but low paid functions were cut to the bone, or cut entirely and outsourced.
 
Race to the bottom? From 1971 to 1976 my pay jumped frequently even though I never asked for a raise. It was 2.5X higher in 1974. Inflation cut into about a quarter of that but the rest I pocketed.

I left for another company in 1976 because the owner was afraid of microprocessors in designs and I really wanted to use them. My new job, where I used a Z80 in a product, was at only a slightly higher pay. However, similar increases occurred there over time.

At both companies I sometimes went against the instructions of my boss to produce what I believed were better and cheaper designs. Worked out quite well. For both me and the companies.

Yep, I really raced to the bottom.

Again, you got the least amount it took to keep you. You can't say you got more than if you asked because you never asked. You really have no idea what you left on the table.
 
In my experience the premise is wrong, I've known many highly overpaid individuals who were, unless the company as a whole failed, fireproof while essential but low paid functions were cut to the bone, or cut entirely and outsourced.

I was training a new hire that quit her old job because she was sick of people who got paid way more than her and didn't know wtf she did. She warned them time and time again. She showed me all the !!!!! text messages she was getting from former managers after she quit on how to do the myriad of things she kept going that no one understood.
 
I've always found the notion odd that a business should "pay you what you are worth."

I mean really. Why would a company pay you what you are worth when they can just not have you and they haven't lost a thing?

There are three possibilities.

1. You are paid more than you are worth.
2. You are paid exactly what you are worth.
3. You are paid less than you are worth.

I submit that #3 is almost always the case. Further, it's the most desirable case as an employee. Those in category #3 are far less likely to be let go and will be valued more.

To the degree your boss/business sees you are costing less than your added value to the biz, you have leverage and so more flexibility in how you go about work.

You have the best chance of finding ways to increase your value to the employer. And you are better at that because you know your strengths better than anyone else. And increasing your value is the best way to get good raises.

Worked for me. I never asked for a raise and got very good ones.

So workers should be ok with being exploited? Somehow I don't think too many people like being done over.
 
Your boss should always feel that you are worth more than you are getting paid, and if you are rational so should you. Now that said, you should always be trying to find out what you are worth on the open market and considering whether continuing your time at your current employer is worth the difference. I was being underpaid in San Francisco, and had an opportunity to be paid a little better in Phoenix (where the cost of living was quite a bit less, so it was a double raise).
 
I've been told a couple of times, that I'd been replaced by two people after I left...

Including my most recent position.

But they couldn't possibly give me a pay rise to stay.

The modern world at its finest.
 
I've been told a couple of times, that I'd been replaced by two people after I left...

Including my most recent position.

But they couldn't possibly give me a pay rise to stay.

The modern world at its finest.

If there's one thing we can learn from Ea-Nasir's one star Yelp review, it's that the modern world is no less fine than the ancient world. You're just indulging in a variant form of the reincarnation fantasy. Everyone likes to imagine they were someone special in a past life. Everyone likes to imagine they would have been a skilled knowledge worker and a free man in antiquity, and not yet another slave or indentured servant or slave or war prize or slave or chattel or concubine or slave or temple servitor or slave or slave.
 
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What better objective measure can we apply to determine what a person's employment (or any other good or service) is worth than what someone is willing to pay for it?

I guess you could say that you're getting paid less than what you're worth if you keep turning down job offers for a much higher wage or salary.
 
What better objective measure can we apply to determine what a person's employment (or any other good or service) is worth than what someone is willing to pay for it?

I guess you could say that you're getting paid less than what you're worth if you keep turning down job offers for a much higher wage or salary.

The market does not have an even hand. We would all likely be dead without farmers, water treatment guys and the like who keep the hedge fund managers alive. Betty the bank VP or Benny the lawyer would likely not survive a week without them. The market's influence is based on coercion, not choice or value of services.
 
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