Be Worth More than You Receive

In Think and Grow Rich, published in 1937, Napoleon Hill talks about the equation of compensation and value.  It’s a complicated concept, one that presents challenges for employers as well as jobseekers to this very day.  Hill’s advice was good; he suggests that you, as a worker, want to be on the short end of the equation.  Yes, on the short end – being paid less than you’re worth. 

If that sounds uncomfortable to you, think about the alternatives.  Being paid exactly what you’re worth is a near impossibility.   I’m not sure anyone could create an algorithm that precisely measures your education, skills, experience, intelligence and energy and computes what you should be paid.  You’d also have to factor in what it costs to provide an office and supplies for you, and decide how much money you save the company by what you do on an annual basis.  Too hard.  That’s why most pay scales are based on the job, and not on the worker occupying that slot.

So that leaves the other side of the equation:  you’re being paid more than you’re worth.  That’s a place you never want to be, whether you are a paid employee or a contractor.  That makes a decision to terminate your services very easy.  At the very least, it makes it hard for you to ever ask for a raise.  After all, a raise, in theory, is an adjustment in compensation to put the compensation / value equation back into balance.

Hill says: “Before you even start to negotiate for a readjustment of your salary in your present position, or to seek employment elsewhere, be sure that you are worth more than you now receive.”

Hill goes on to tell the (probably apocryphal) story of a young man who was dissatisfied with his job.  He applies with a well-known company, and makes a good impression on the hiring manager until the manager asks him what he thinks he should earn if hired.  The applicant replied that he had no particular sum in mind, so the manager said, “We’ll try you out for a week, and then we’ll pay you what you’re worth.”

The young man turned down the offer, saying – “I can’t afford that.  I’m making more than that now in my current job.”

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