Before you answer the titular question, allow me to ask you this: were the nine Pennsylvania coal miners who were trapped 240 feet below the surface for nearly 80 hours in July 2002 overpaid, underpaid or paid fairly?
How much would it take?
If it took Demi Moore $1 million to get down and dirty with Robert Redford in Indecent Proposal , how much would it take for you to get down and dirty as a miner? Probably more — so when you consider that the miners were making modest salaries, many would rush to say that indeed, the miners were underpaid. Were they?
Allow me first to state the following disclaimer: what the miners endured was something that I would not wish upon anyone. They demonstrated courage, determination, class, and represent a real-life miracle — actually 9 miracles. That being said, I would also argue — whether this is PC or not — that they were being paid fairly. After all, while mining ranks as a dangerous job, there are always many who are willing to enter the profession. Before you think of ways to insult me, read the following.
What about athletes?
Athletes make monstrous salaries. Back in the 1990s, the National Hockey League’s Ottawa Senators offered their first pick in the amateur draft, Alexandre Daigle, a five-year, $12.25 million contract. Many questioned why then general manager Randy Sexton would pay an unproven talent such a high salary. Even more people questioned how Daigle could accept such an offer.
After lackluster stints in Ottawa, New York, Philadelphia, and 100 career goals, Daigle retired, headed to Hollywood and got a taste of Pamela Anderson. When asked about the contract, he stated rather matter of factly that the Senators put a cigar in his mouth, a glass of champagne in his hand and a pen in the other. “What was I to do?” he said. Well, what would you do?
I always appreciated his candor and you know what, Daigle’s experience highlights an importance lesson: you are worth as much as you can get. Finance theory states that value is equal to the present value of all future income. But value and income are slightly interdependent: value is a function of income yet your value determines what you earn. While what you earn is fixed and objective; your value is variable and subjective. In other words, you have to balance perception with performance.
Think big to become huge…
Think big to be big
Some rare executives, like General Electric’s legendary Jack Welch, are famous for compensating employees differently according to performance. Sadly, in most companies pay is unfair. But so is life, so stop complaining and make the most of it. You have to want more to get more. If you were always a B student and finally got an A, you could now become an A student if you wanted, so never settle for anything less.
Deliver the goods
The reality is that athletes and entertainers are unique. Sure they get paid obscene amounts but if they can fetch top dollar, who are we to criticize? The key is to understand that salaries and grades are not carved in stone, which is why you need to deliver the goods. If you do not, your value will crater and your income will follow.
For years, corporate chieftains were criticized for earning stratospheric salaries even when shareholders suffered. But overall, they did create economic activity and even if the spoils were split unevenly, there was some redistribution of wealth. With the recent corporate explosions, the problem is that executives got richer at the expense of shareholders, bondholders and the community at large. Hence why it is now harder to justify their salaries.
There’s no “i” in some teams
Ultimately though, we must accept that some people are crucial to a team. The miners were hailed for surviving as a team. This is not surprising as their work consists of a team effort, not one of them stands out more than others. Sports are often different; just look at Ferrari’s Michael Schumacher, who makes tens of millions per year. Surely the engineers and entire support team play a role, but who are we kidding? Schumy is the one driving and the buck stops at him, which is why he makes so much more than everyone else. And he is ultimately worth as much as Ferrari is willing to pay him.
Philosophical discussion notwithstanding, you now need to have a framework for comparing what you make. How can you tell if you are getting what you deserve?
Consider your worth
Ask yourself the following:
- How do you stack up vis-à-vis the other employees in your department; in your company?
- How do you stack up vis-à-vis the industry?
- How do you stack up vis-à-vis people in your line of work at other companies?
Ultimately, you should never choose a job based solely on money. Why? The problem with money is this: most of us have insatiable needs. When we experience an increase in wealth, our old needs (which used to make us feel quite satisfied) take a backseat to bigger wants. So while we should avoid being driven by money alone, it is only normal that we would wish to extract as much out of the system as we can. It may sound unfair, but it is true.
Ash Karbasfrooshan is also the author of Course To Success, available at www.CourseToSuccess.com.