Lots of people talk about wanting to make more money, but many aren't willing to do what's necessary to get there. There is a simple reality for how most people get paid in business. It's split into the following categories.

1. Clerical/Labor

This category is the lowest paid in business. But it's relative to the particular business. Engineers or financial underwriters can make a lot of money, but, compared to some of their counterparts from the categories below, their pay is small. Companies look to pay as little as they can to this category since the labor payroll is primarily a cost center. Smart companies will pay well to retain top talent but they have firm limits to keep their profits in line.

2. Management

People who do well in the first category can often move up, but it's a small percentage. Whether managing a team, a division or an entire company, these power players can command a good salary increase over their direct reports as long as they can continuously prove their worth with effective output for the company. Bonuses can play a key role in making sure the incentive is enough to motivate peak performance. Still, management makes relatively less than the final category.

3. Production

The smallest company can pay the highest compensation if they are paying for sales and business development. Top talent in sales and marketing can create commission structures that put their compensation above the CEO. Those who create products or markets that generate large dollars can be rewarded with bonuses that dwarf a typical manager or even executive. Simply put, if you want to make the most money, learn how to generate new business.

These categories will impact your earning capability your whole life, regardless of whether you are an entrepreneur, executive or laborer. You are the only one who can do what's required to move from one area to another. So if you don't like where you are, invest the energy and do something about it.

Published on: Nov 24, 2014
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