Understanding How Compensation Works
I first learned about the way in which the laws of compensation work after listening to lectures by Bob Proctor on the subject and I remember once hearing him talk about a very important aspect of how a person is compensated for the work they do. He said something along the lines of: “The amount of money you can earn is in direct relation to the following:”
- The need for what you do
- Your ability to do it
- The difficulty there is in replacing you
The Need for What You Do
This aspect is generally taken care of without anyone really needing to do anything about. That’s because there is usually a need for what a person does in their line of work. If you work for a company, it is almost certain that you were hired because you possessed a certain skill or qualification that matched a need that had to be filled by the company.
If you are running a business, then your product or service must have a need or a customer base out there for it or you wouldn’t have a business! So the need for what it is that you do is generally taken care of without any effort from you.
Your Ability to Do What You Do
When you are very good at doing a particular thing, you are generally paid in proportion to how good you are. This aspect of the rules of compensation is entirely under your control.
You get to choose how good you are going to be at a certain task and then by doing it to the very best of your ability; you place yourself in a very strong position and get paid accordingly. This is naturally something that is in your best interest to excel at.
By taking that extra home study course, practising and honing your skill set to a high degree and going that extra mile to be the best at what you do can pay off in spades. When you become so good at what you do that you become very difficult to replace, you satisfy the third aspect of the rules.
The Difficulty in Replacing You
While you may not be indispensible (and few people are), you can become so good at what it is that you do that you make yourself very difficult for the company to replace you. You could become one of the best at what you do and there may be few or even no one else that could do your job to the level of excellence that you do.
When you occupy this position, your value to the company is such that they could not afford to lose you. In this position, you can command a much higher level of pay than someone who is more easily replaced.