how to judge compensation

Graduation Cake Guy

When you’re a recent graduate looking for a new job, you’re going to be chasing the highest salary. Admit it or not, most grads can’t think much past getting the most money possible.   After all, there’s student loan debt, the need for a new wardrobe, a car that runs without sounding like a machine gun and the biggest factor of all – feeling like it was all worth it somehow.

Money matters. Pundits find it easy to discount the importance of money, but if you’ve just spent four years skimping and saving the difference between $40,000 a year and $60,000 (or $20,000) is no minor thing.  A few thousand dollars more can mean a lot – furniture, or an apartment in a better neighborhood, or even just having enough left over to pay down your student loans a little faster.  Money can make a big difference early in life.

But if you’ve been working for a while, your salary has probably increased since your rookie year. Maybe that $40,000 job you took ten years ago pays you $60,000.  Maybe it pays you $100,000.  The money is probably (but not definitely) better.  Sure, there are other considerations – now you need a nicer car, a bigger house, the kids are on the way and let’s face it – a dollar isn’t worth what it used to be.

In 2009 you need to start thinking about how you measure compensation. Your job, whether you’re an employee or an entrepreneur or even a stay-at-home parent, has many forms of compensation.  Judging the compensation solely based on a score is a bad idea.  How bad?  OK, I have two books to sell you.  One costs $23.  The other is $4.99.  Which one is worth more to you?

Any endeavor you undertake needs to compensate you by:

  1. Helping you learn new skills.
  2. Letting you strike the balance between work and life.
  3. Making you a happier person.
  4. Creating a work environment you enjoy.
  5. Allowing you to contribute to the world in some way.

Far too often we think that these things don’t matter – if the money is good enough, we can forget other shortcomings.  Everything matters. I know that for years I liked to think that I was not my job – that I was somehow better, or separate.  My job was just a salary to support my “real” life.  Your job (again, that could be anything from an entrepreneurial effort to an hourly wage) cannot be viewed as just compensation.  It does not support your “real” life – it is your life.  Unless you are born into the idle rich class, your work will be one of the defining factors in your life, if not the defining factor.  Don’t sell yourself short by thinking that the only way your worth can be determined is by attaching a dollar sign to it.

photo credit: CarbonNYC