WHAT FACTORS AFFECT YOUR INCOME?
What are the factors that determine your earnings? Is it your skills, experience, competence, diligence, luck, profession, your network and contacts or your greed? Some people always seem to get more material rewards out of life than others. Many companies have fixed salaries, take it or leave it. Some have job grades with small margins for negotiations, while for some jobs you can negotiate with large margins. Have you ever thought who or what determines how much you earn? Is it your employer, the customers, the industry average, the government or some mysterious ‘market force’ or is it your skills, experience or your connections? Factors Determining Your Income No matter how highly you price yourself, three factors determine the material compensation (meaning money or equivalent) you get for your work. How others value what you do – People who are paying you for your services put a certain measurable value on your contribution. Your skills, experience and the value you add to the buyer of your services or your employer, determine the material compensation you get. This value may be very subjective as some people are more skilful in convincing others that their contribution should be valued higher than that of others. How well you do what you do – This is trickier. It doesn’t mean that if you do your job better than a colleague doing similar tasks at the same workplace, you will automatically earn more. The money value of what you do depends on the context and how you can leverage your contribution. The chef at a cheap diner, no matter how well she cooks, will certainly earn less than a chef at a five star Michelin restaurant. A welder with short training might earn much more than an experienced nurse with two university masters degrees. But the employer paying the welder more views his (or her) contribution as being more valuable