Your Employer Pays You For What?

By: Sean Caruthers

The debate seems to go on and on. Your employer pays you for what? How do you explain your salary? Let's examine some often touted rationales employees use to explain their pay.

Your employer pays you for what you know. Sure they do buddy. You may have heard this one before. This rationale is popular among employees with a pile of credentials and qualifications. Does your employer really pay you for what you know? Yes or no. Yes, we all would like to believe doctors and teachers are paid for what they know. Both professions have reasonably high prestige, but the teaching profession has historically low pay. But you say, doctors spend more time in college than teachers, take greater risks, and solve life threatening problems. That's why doctors are paid more than teachers. Maybe so, if this reasoning is valid then how do you explain athletes and entertainers pay? If the pay according to what you know crowd hinges on education and credentials then how does a kid with 2 years of college go pro and make a killing? While the poor doctor-to-be has six more years of college and residency. Let's move on.

Your employer pays you for what you do. Yes, they pay you for what you do. What are your job duties? Whatever they are you carry them out. You work for them and they pay you. No, they don't pay you for what you do. As you know, everyone is doing more with less. Just ask some of the workers who survive corporate lay offs. Those survivors are doing the work that is left behind by those who lost their jobs. Those survivors will not see a pay increase for taking on the additional load. As a matter of fact, the survivors are just happy to still have a job. So, you say no one has been laid off for a long time. Has your employer replaced the person in your office that quit, went on maternity leave, got fired, or got promoted yet? If your employer has not then are you getting paid for what you do and what they did?

You are paid because of the job's high value to the employer. Yes, this is the economics text book answer. The employer will not pay more than the value of the job to said employer. What about when companies early retire older employees with high salaries and replace them with new lower paid recruits? Is the value of the job diminished in the eyes of the employer just because they want to pay lower salaries? Not necessarily, the company may still need that job function desperately. Reducing labor expense does not mean the job is no longer valued. As a matter of fact, it could mean just the opposite. Consider the costs to automate manufacturing. Automakers valued the assembly line so much they eliminated most of the human workers!

Your employer pays you for what? Yes, fill in the blank by all means. Just try not to use any of the previous three rationales. If you really want to have some fun then ask HR what do you get paid for? On second thought don't bother, they may not know either.

Copyright © 2007 Sean Caruthers

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