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How You Should Compare Salaries

Posted By Jim On 08/21/2007 @ 8:47 am In Career | 20 Comments

You just found out that Bob in the next cube, who does basically the same job function that you do, is making 20% more than you. Bob isn’t that much better at his job and the idea that he makes 20% more really bothers you. Does that sound familiar? If not, how about this scenario?

A friend you used to work with just left to work at another company and is being paid 20% more to do the same job. He isn’t that much better at his new job, is pretty much your equal, but by virtue of leaving he is being compensated 20% more. Does that sound familiar? More importantly, does that bother you?

If it does, don’t feel bad. You’re not alone and what you feel is perfectly natural. However, as you probably recognize, it’s not a healthy feeling nor is it a happy one. The reason you feel jealous of, rather than happy for, your friend is rooted in how you, and I, were raised. As human beings, especially competitive Americans, we have constantly competed against one another throughout our entire lives, starting in school with grades. You wanted to be the best at what you did, have the highest grades or the fastest run. You constantly competed to see who was better at this or that and it was healthy then because it drove you to succeed. It was great then and it pushed you, but now that way of thinking is no longer is accurate. It’s become a very poor motivator because it brings out negative feelings rather than positive ones.

Salary Is Not A Good Measure of “Success”

Money is not a measure of either “success” or happiness. I think any discussion of salaries really needs address that first. Think of all the movie stars or athletes with loads of money and see if they’re actually happy. If you pin your entire life and your happiness on money, what happens if you get it? You lose your drive, you lose your desire to improve, and you end up like lottery winners who now need something to do and turn towards the bad things in life. Money itself is a poor indicator to begin with.

Secondly, since money is not a proxy for success, it’s also wrong to use your salary as a means of comparing success. The best example is that of a women in the workplace. While working, she might be tempted to compare her salary with someone else and use that as a means of measuring success. What happens if she had a child? At the very least, near the end of the pregnancy, she’ll have to stop working and potentially take unpaid leave. Does that make her less “success” than someone who is still drawing a paycheck?I say no and she would likely agree (I think everyone would agree). In reality, being a mother may make her feel more successful than she felt when she was being paid a salary. In that simple example you can see how money isn’t truly an accurate measure of success anymore. There are simply so many other things out there other than money that make us happy.

Another reason salary is an inaccurate measure of success is because there are simply too many variables in the equation now. Back in school, you might have compared test scores or grades with your classmates who took the same tests and received the same education. The differences in grades could be attributed to personal factors such as your intelligence and your preparation. In the real world, you’re competing with folks with different educations, different skillsets, and different career paths. Bob in the next cube could have skills you simply aren’t aware of and that’s why he’s getting paid more, you don’t know and so comparing salaries in bad.

How You Should Compare Salaries

You shouldn’t be comparing yourself to anyone else other than yourself. That’s the secret to being happy and why I don’t really care what other people earn. When I found out a friend of mine was getting a huge pay increase to move to a totally different industry, I was happy for him. I mean this guy’s salary, with bonuses, will likely be double my current salary. Double is a lot. He’s a hard worker, a smart guy, and a great guy to be around; you can’t help but feel happy that he’s made a quick move up in his career. But it’s very easy to see his salary and be jealous or resentful. Why don’t I feel that way? The reason is because I feel successful because I’ve exceeded my own expectations, set a year ago. I’ve achieved the goals I’ve set for myself thus far that’s what drives me. That’s what you should drive you, not money.

Don’t compete with Bob, compete with yourself from a year ago, from five years ago. Are you where planned to be a year ago? If so, excellent! Start setting your sights higher and your goals larger and get going. If not, re-evaluate and start working hard. Comparing yourself to you a year ago is far more accurate than comparing yourself to Bob and you should be comparing not just salary for the other things in the life that make you happy.

Do you golf? What’s better, making another 3% in your salary or actually shaving a few strokes off your game? Do you run a business? Would you rather earn another sale or hear of a story about how your business helped someone do something they had wished to do all their life? Life is so rich, rewarding, and fulfilling that to judge it on the basis of income would be such a waste.


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