Is this good for the company?

Category: Business

Published: 11/01/2010 03:29 p.m.

Steve just started at a new job. He makes $40,000. A year goes by, and Steve has not received a raise.

Steve: I need a raise.
Boss: What have you done for me lately?
Steve: Uhhhh.....

Classic problem, especially in the field of knowledge work. Steve wants more money for his hard work, but his boss does not see the value. Steve hasn't made any more money for the company, so his boss doesn't think he should get any more money. What is Steve's value? Why should he get a raise? Steve needs to think about this.

Steve thinks about his work. He comes in early, occasionally stays late, and works from home on some weekends. Does he need to put in more hours? He is already near the top of that list. That isn't the answer. He is probably working too much as it is.

If work is not about the hours, then what is it about? Steve helps design and configure widgets for a widget company. Should he be designing more widgets? Maybe, but that isn't a great answer. Let's look at some of Steve's co-workers to see how they get raised.

Ashley is in sales. She sells widgets. Part of her pay comes from commission. If Ashley increases her sales, she increases her paycheck. Pretty simple. Ashley doesn't need to ask for a raise, she just needs to sell more.

Jamie is a widget builder. He just builds widgets that come in from orders. He can't just make more widgets without them being sold first. But, he can make them faster, and fill more orders over a time. This improves cash flow and capacity to make more sales. If Jamie can fill widget orders faster, he can help the company make more money. When Jamie does this, he could probably secure a raise.

Steve's situation isn't so clear-cut. He designs widgets. This is usually done before the widgets are actually sold. If Steve designed many more widgets, that doesn't really make the company more money. Steve needs to figure out how through designing widgets he can make more money for the company. Once he's figured this out, he can then do it. Then, he can show his boss the gains in sales/revenue, and prove his value to the company. That conversation would look like this.

Steve: Last year, widgets I designed cost $50 to make, and we sold 1,200. This year, I redesigned the widgets to cost $40, and because of new features, we were able to sell 1,800. I want to redesign some other widgets. I think I deserve a raise.
Boss: Ok, let's talk about it.

That's a great vision, but it doesn't translate to how Steve should spend his Tuesday afternoon. Reading a trade magazine? Networking event with some top clients? Working with other designers to discuss features? Meeting with sales to talk about struggles? The list is infinite.

Buried in Steve's envisioned conversation is a goal. This is Steve's goal:

To lower costs and increase sales to make more money for the company.

Now Steve has a tool to use when deciding how to spend his time. He can simply ask himself "Is what I am doing now helping me to lower costs or increase sales of widgets?" If yes, then keep going. If no, then find something else to do.

Before Steve spends his year dedicating himself to this goal, he should probably confirm it with his boss. Steve's boss's task is to make sure his team's goals cover the needs of the boss's department. All the responsibilities need to be covered somewhere. But, the tasks to complete them don't need to be there.

If Steve confirms his goal with his boss, then he can get started working towards the goal. Part of his work will be tracking his performance. That is OK as long as it doesn't prevent him from accomplishing his goal. Same for attending meetings, trainings, and other work that is not directly designing widgets.

Most people don't think about their cost to a company compared to their value to the revenue. What can you do today to make more money for your company? Unless you purely bill hours or are a small shop, you probably have to think a bit before coming up with an answer. I would spend some time thinking about it, because the answer to this should define your job.

If everyone in the company understood

  • How they make money for the company
  • How they can make more money for the company
  • How that translates to day-to-day activities

then the company would function at a higher level, and would very easily be able to either increase salaries, or find who to fire.

Find out today how you can make more money for your company, then do it, then show your boss the results. This makes asking for a raise an easy sell.