As most employees know, they usually have little say in compensation, other than possibly negotiating salary when starting and possibly asking for raises. However, there are a few key things that all employees should know regarding compensation.
Capture All Compensation, Not Just Salary
A common mistake is to only look at salary as part of the compensation. Employees should really take a look all the benefits of which they will take advantage. For example, insurance is a key item. How much will you have to pay and how much will the company have to pay? Commute expenses? How much paid time off?
If you can assign monetary amounts to all the items, you can make an honest comparison. For example, I was offered one job where the salary was almost equal to my current role. However, when I looked at insurance costs and what the company would pay, I ended up with more take home pay at the new company.
Compensation is Important, Until it Isn't
If you are just starting out or in a lower paying field, then money is important. After all, you have to be able to live somewhere, buy food, save, etc. In this situation, you are focusing on making as much as possible to survive. Once you get to a certain point, the extra money starts to have less of an effect. For example, someone making $15.00/hour may leave for a new job that would pay $16.00/hour. That is a significant jump at that pay rate. However, if someone is making $75/hour, another position paying $76/hour is nice, but probably not the biggest factor.
Once you are at a point where the salary is good enough to survive and save, pay less attention to salary and more to other factors - benefits, culture, people, etc. At a certain point, you'll derive more satisfaction and engagement from non-monetary elements. Plus, you will learn that managers have little latitude in budgets for pay, but often have a lot of latitude for other things that can help.
Don't Always Negotiate for More Money
Understandably, companies are very cautious about giving raises and bonuses. What that means is that many managers have little flexibility when it comes to raises. Going in and demanding raises can be difficult - and damage relationships.
However, that doesn't mean getting more compensation is impossible. If money is not a possibility, consider asking for things that provide benefit to you that are not salary related. Ask your boss to pay for a course you want to take to improve your skills. Request to go to a conference where you can network and learn. Ask for a flexible work schedule or additional time off.
What you will find is that adding money to the salary line of the budget sheet is incredibly difficult. Getting money from another area is usually easier. I had one employee who asked for a $1000/year raise. I couldn't get that approved by anyone in senior management. However, I offered to send him to a professional conference out of town. The conference would be a chance to go someplace nice and to update his skills. The conference actually cost the company almost $3,000, but I was able to get that approved with no fuss. I realize it makes no sense that a company would spend $3,000 without blinking, but $1,000 was seen as an impossible task.
As employees, you will find that while money is always nice, once you cross that survival line, then other things matter more. Making a couple extra bucks, but doing a job you hate isn't worth it. A higher salary that comes with working for a dishonest company isn't worth it.
The companies that get it - the ones that value and appreciate their employees - are the ones that probably don't pay the best, but offer a great environment, with great people, great bosses, and a chance to keep growing.