Saturday, September 24, 2011
Want to get a raise?
The most important aspect of requesting a raise is understanding the economics of business.
Like weight loss [calories in less than or equal to calories out], business profits are as simple as income greater than or equal to expenses.
Challenge: people believe they should be continually rewarded for doing their jobs
Reality : people are already rewarded for doing their jobs. This comes in the form of a wage, benefits, etc based on the contract signed.
Solution: education/understanding that compensation above and beyond the defined wages, comes in the form of effort above and beyond the daily expectation. If/when you are making the company extra money, there should be an opportunity to be rewarded for / share in that opportunity.
Comparable: when the company isn’t making money, you are not asked / expected to contribute to that loss. You only participate in the upside.
Challenge: people often try to calculate the gap between what they are receiving and the customer is paying
Reality: people have not been educated/ have little understanding of all the costs associated with running a business. Many companies have a goal of collecting 3-10% annually.
Solution : people need to educate / be educated on what fixed & variable expenses are; by definition and by literal terms.
Comparable: wages are normally a companies highest fixed & variable cost.
Challenge: few people want to expend the effort that it takes to maintain the hours & effort that lead to the desired paycheck
Reality: we are in a global recession and only the strong will survive. Those who don’t have the foresight to roll up the sleeves will have a harder time finding that ‘plan b’
Solution : people need to be educated/reminded about Newtons 3rd law. For every action, there is an equal and opposite reaction. The time to overdo it... Is now.
Comparable: the saying is 80% of your business will be generated by 20% of the team. If you don’t have hours/effort to hear, see, do, teach & follow up what they are doing, you’ll liely end up as the victim.
Challenge: people have been led to believe that tenure predicates raises.
Reality: performance is the only valid metric that should predicate raises.
Solution: when the company is not making money, the company doesn’t shell out money (common sense) until the company starts making money again
Comparable: General Motors was put out of business inpart due to an unsustainable workforce, hence ended up wiping out much more than just its workforce.
Want to maximize your chances of getting a raise in your company?
1. do your homework: know what the financial status of the company is. This simply makes you look smart out of the gates.
2. invest above and beyond the already agreed upon expectation. You will likely find yourself rewarded beyond the already agreed upon compensation
3. plan on rolling up your sleeves every day for the next 3-4 years. If yourself and your company make it, you & they will be luckier than a high % of North Americans who won’t.
It’s time to get to work.