What does your pay mean?

We assume that our pay is the objective value of all our skills and experiences to an organization. While this is true, it is not the entire truth. Our pay is affected by factors that are within and outside our control. Starting off with the factors that we can influence are (a) our education – the type and number of qualifications we have and the institutes that we have got them from; (b) our experience – how long we have been working, what kind of roles we have done; and (c) our career path – which organizations we have worked for, how often we have switched jobs or gotten promotions, and our performance levels in these organizations. Most of these are either conscious or deliberate choices that we have made or are able to influence or control to a certain level.

Next, let’s look at factors we do not control such as (d) market driven pay pressures – if our skills are in high demand or not, certain locations are paid higher or lower based on local pay rates or cost of living differentials; (e) sector driven nuances – certain sectors tend to pay premiums over others basis the nature of their product or service or their profit margins; (f) organization specific pay practices; and (g) the overall economic growth as well. While we feel we do not control these factors, we definitely keep them in mind while pursuing a career, be it at the education stage or the job application stage.

We may have noticed that certain organizations may consider paying us better than others – hence, pay is subjective. While it is the most direct value / remuneration an employee receives from their employer, it is not the only form. We all value the organization’s benefits, policies, and culture and these all add in to the total value we receive. In fact, when we speak about our organization to others, we are more likely to discuss these other forms of value than pay.

However, while looking for a new job or at the time of the annual compensation revision, it is usually only pay that we look at. We must realize that pay is not fully objective, is influenced by a variety of factors, and is not the only value we derive from an organization.