Write Your Own Paycheck: Use the Law of Compensation
to Earn More Money
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
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.
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.
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?
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.
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?
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.
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.
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