Updated: Jan 14, 2019
How many times have you heard someone say that they are "overworked and underpaid"? Let's examine whether that's actually true or not.
What Are You Paid For?
If you're feeling overworked, you're probably carrying too much of the workload or working too many hours so you might need to say "no" more often or figure out how to shift some of the load to others.
What's more interesting though, is the idea of feeling "underpaid".
Being "underpaid" would mean that you're receiving less money than the value of your work. So who decides the value? Is it determined by the worker? the employer or client? or the marketplace of talent?
Many people think that the value of their work is somehow unequivocal and they themselves set that value. What are they basing it on?
Some think that the amount of years worked at one company adds value. This reminds me of a funny question I once heard. "Do you have 30 years of experience, or one year of experience repeated 29 times?"
Others think that the amount of effort they put into the job, or the sacrifice it takes them to show up every day adds value. I've heard people citing the fact that they have to get up at 4 a.m. to get to work on time, or that they have to leave their newborn at daycare, or that they don't get to make it to their kids' school activities as reasons why they should be "worth more" to their employer.
People also cite the cost of their education or their certifications as reasons why their work should be valued more highly.
Value is always a perception, so there's definitely some wiggle room in what makes an employer value someone's employment. Social realm things like sacrifice, commitment and loyalty might sway the judgment and tip the scales a bit, but the majority of what makes up the value of work is its contribution to a value chain that end up with someone buying something in an outside market.
In the financial realm, money comes to you when you provide value to a marketplace that is willing and able to pay you for it. How much you'll be paid depends on many factors including how much the result of your work is desired or needed, how difficult it is to do and how many other people can do it. (A brain surgeon makes more than an Uber driver.)
If you sell goods or services for a living, this is obvious, but few realize that it is actually the same equation for people who are employed. The "marketplace" in for an employee is the employer. The employer says, "I need X done, and that job is worth Y to me". Just like the market determines the value of products and services, the employer determines the value of a job.
A typical problem that can occur is that someone comes to a job interview with 5 major skillsets (lets call them A, B, C, D & E), but the employer doesn't actually need B or E. The employer is looking for someone who can do A, C and D. So the person gets hired and runs around thinking "I'm worth a 5, but I'm being paid like a 3". The truth in that situation is that the employee is "worth" 3 - because the employer's need sets the value. If the employee wants to be paid as a "5" he or she would have to find another employer that had need for all 5 skillsets or convince the current one that the other 2 skillsets could be put to valuable use.
Another problem is jobs that are created to solve problems inside a company, but with little to no connection to a value chain that leads to consumers in an external market. The bigger a company gets, the more likely this is to happen.
I once consulted with a company going through downsizing. Circumstances had shifted radically and they were facing massive losses of revenue and needed to cut costs. They were going through a "reengineering" exercise where they tried to determine which jobs actually needed to be doneto produce a product customers would pay for. I was rather surprised to learn that there 26 people employed full time to learn the policies of the company and explain them to other employees who asked. From the perspective of those employees in the "policies" department, (many of whom had worked at the company for more than 10 years) their work was "difficult" (it was like getting a law degree to learn all those policies), "needed" (their phones rang off the hook with employees looking for help) and "well done" (they received high marks on all their evaluations). So how could anyone say that their work was not valuable?
From an internal perspective only, it WAS valuable, but it was far removed from the value chain leading to end users. I doubt customers would be happy paying a higher price because policies needed to be explained internally. Inefficiencies like this department are what allow younger competitors to come in and take customers away from monoliths.
Ideally, every employee should look at their job from the perspective of value to an end user and from the perspective of profit to the employer. Does the work you produce support activities that make a product better, cheaper or more valuable to your company's customers? And is your employer able to make a profit on your productivity? Is your effort bought at a "wholesale price" and "sold" at retail - in the sense that it contributes to the value of what the company sells for a profit? If the answer to any of these questions is no, then your employment is actually a "bad deal" for your employer and it should come as no surprise when your job ends up on the chopping block during a reorganization exercise.
The greatest job security you can have has nothing to do with tenure or even loyalty - it is doing work that has value that can be tied to what your company's customers pay for.