Get Raise in Salary by Creating Value
It is very common that staffs want to have salary increment every year and in certain percentage raise. When the company does not give increment or the increment is too little, then some of the staffs will start to talk about, gossip about it and so on. Of course, we under the employment, what are we looking at is the extra money to bring home, to have better life for ourselves and family. There is nothing wrong with it.
Today, let me share with you one of the logic that I have on salary increment.
Mr. Joel is working as an IT consultant that implementing ERP system. Every year, he is handling one new project for the company and bring in $200K revenue in consulting fees to the company. Currently, he is earning $120K per year. To the company, they are still have profit of $80K after deducting Mr. Joel’s payroll.
Next year, the company giving 10% increment to him but he demanded for more. After negotiation with the boss and he is given 20% increment instead. So now happily he is getting $144K per annum. Mr. Joel still bringing in the usual $200K revenue to the company, and the boss said well, the company is still profiting $56K per annum.
On 3rd year, time for the staff reviews and the boss asking Joel, instead of running 1 project this year the company want to let him run 2 projects. So the company is giving 20% increment after the negotiation. Happily, Mr. Joel is bringing home $172.8K per annum. But for the year ended, Joel only manage to run 1 project as he said could not cope for 2 projects. So the company only have profit of $27.2K
On 4th year, time for staff reviews and again Joel demanded 20% increment to $207.36K and still running only 1 project. And the company have loss of $7.36K. The boss told Joel that the company is not making any money and decided there is no increment for the year.
The morale of the story is, the employee need to CREATE VALUE in order for the company to give extra reward like salary increment, better bonus and etc every single year. As the company also need to make profit. If the costs of an employee keep increasing but the revenue bringing by him / her get stagnant, then it does not make sense for the company to give extra increment.
We will always ask what can the company give us. The better way to me is what can we add value to the company. If at the end, the company does not treasure us after we have added more value and discussion with them, then move on.
Think of What Can You Contribute to Company First! Create Value!