“I am not making enough. I need to make more.”
“How do I increase my salary?”
Whenever I hear such comments, I often asked how much increment they are looking at. The answer is often “AS MUCH AS POSSIBLE”.
I’m sure your boss would be puzzled by that answer. If fact, he might even be put off by that response, taking you as a mindless fool who is trying to extort him.
You need to be more precise in terms of how much you are looking at before any negotiation can take place. Some will be then asking me, “What is the market rate? How much do you think I should be asking for? Is $500 too much?”
Why bother to be capped by the market rate? Do you know you can actually double or even triple your salary? But before you can increase your salary, you must understand what determines a person’s salary.
Salary = Amount of value you can create
Your salary is a reflection of the value you create for your employer.
Imagine you are the owner for a cake shop. You have two sales assistants (named A & B) to help you out at your cake shop.
Sales Assistant A help to:
– Open and close your cake shop on time
– Serve customers at your shop
– Keep the retail outlet clean and tidy
– Help to keep good records of your daily sales and expenses
Value created: $10,000 revenue a month
Sales Assistant B help to:
– Open and close your cake shop on time
– Serve customers at your shop.
– Keep the retail outlet clean and tidy
– Help to keep good records of your daily sales and expenses
– Do survey to understand what makes your customers happy, what keeps them coming back
– Surf the net, watch out for trends on innovative cake recipe
– Take initiative to make cold calls to hotels and restaurants to generate potential sales leads
– Consistently seeking for opportunity to get your cake shop published on food magazines and news report
– Got your cake shop to participate in food fairs to help publicize your shop name
– Create promotional offers to encourage more buying from customers
Value created: $30,000 revenue a month
How much would you be willing to pay your sales assistants? If the market rate for a sales assistant is at $2,000. Is it going to be at market rate? Below market rate? Or above market rate?
If Sales Assistant B came up to you and ask to triple his salary from $2,000 to $6,000, would you have agreed to it? To any sensible bosses around, they would say YES, because the additional $4000 nothing compared to the extra value he can bring to his employer. If Sales Assistant B’s boss does not agree to the raise, there’ll be many other cake shops who are willing to pay him.
That is why people who choose to be value creators are constantly being head hunted by other firms willing to double their salary.
When you can create tremendous value, your market value and salary will increase automatically.
