Fattier compensation can boomerang

Many of us think that we get happiness, satisfaction, less stress and job security when we earn a lot of money. But it is not true. Our sense of value and worth are related to how much we earn. This is nothing but illusion.

This conclusion can be supported by the story of an executive who was not satisfied with what he was getting. So started looking for greener pastures and he landed a job that would give him more. He then told his employer about the offer he received. His employer gave him a substantial hike in his salary. He was satisfied and stayed with his employer, but his happiness didn't last long. One year later, the employer had to resort to a round of layoffs because of the market conditions and the he was the first employee to lose the job. He was laid off not because he was a bad employee, but because he is overpaid. There are several such cases illustrating that fattier paychecks can boomerang.

The episode tells us that we can't rely on short-lived salaries, promotions and pay hikes to keep us happy. We will be contended with our contributions in the long run.



Thinner pay packs get us rewards

In some situations, smaller pay checks can in fact be a bonus. It will buy you time to acquire skills and experience to earn more in the long run. With less pay, we get flexibility. In real terms, compensation is related to an exchange of value for value. Sometimes we may prefer contributing less to spend more time on another area of life.

Instead of thinking about getting your dream salary, visualize how your over enthusiasm to earn more works against you. Then you will be able to contend with what you are earning.

Potential backfire No. 1: You're the first one to be fired

During these days of economic slowdown, companies have to cut costs. The axe falls on the highest salaried employees. If you are being paid more than your market worth or contributions, your job could attract the axe.

Potential backfire No. 2: The more you make, the more you lose

Say, you make $ 85,000 a year and your earnings go up to $90,000 after the hike. It is exciting, isn't it? Do the calculations and you realize that your gain is just a few hundred dollars. This is because your tax burden shoots up with a hike of a few hundred dollars.

Potential backfire No. 3: You might be priced out of the market

Suppose you are earning $10,000 dollars than your peers. Bored with your present job you looked for another job but you could not get an opening that fetches as much as you are now getting. Even if you are prepared for a pay cut, companies won' be willing to take anybody with a pay cut. They prefer new recruits and pay them a little more so that they will stay satisfied. So nobody will hire you because you are overpaid. The high salary boomeranged.

Potential backfire No. 4: You could be trapped in a position

Your salary range discloses a lot about your career path. A bank takes a young man in the highest salary range for a non-manager. He is already at the top of his salary range and he can't earn any more money without changing the position or company.

Potential backfire No.5: More money does not mean more happiness.

You may be earning a lot - what does it matter when you are not enjoying what you are doing. Many may think that they will be happy if they get $XXXX. That day comes, but you are not satisfied. You want more. In fact you will be really happy when you don't bother about what you earn.