“When an actor comes to me and wants to discuss his character, I say, ‘It’s in the script.’ If he says, ‘But what’s my motivation?, ‘ I say, ‘Your salary.’ ” – Alfred Hitchcock

My No. 1 son works for an L.A.-based business that does postproduction editing of movies. He’s new to the job, but, as the company’s top computer engineer, he’s become an important part of the get-it-done-on-time crew. The $50 million-to-$100 million movies he works on are about to be released into theaters. With just a week or two left to go, they must be perfected in all sorts of technical ways — adjusting color, adding special effects, modulating sound tracks . . . sometimes even splicing in entirely new scenes at the very last moment.

To accomplish this, No. 1 and his fellow technicians often work around the clock. Since he began the job six months ago, he’s never worked less than 60 hours in a single week. My advice to him when he began: Work your tail off. Make yourself invaluable. Then ask for a raise. That’s exactly what he did. Good boy.

I’m proud of how hard he’s working and his willingness to ask for a raise. But I was shocked when he told me how much he asked for. I won’t tell you what it is (lest his fellow workers read this), but it’s a lot.

He figured out what his salary would be if it included the time-and-a-half he’s been getting for the extra hours he’s been working (something he’s apparently entitled to by California law) and asked for that. I don’t know if he’ll get it, but making the demand as he did — rationally and with good reason — was the right thing to do.

I’ve been involved in a number of salary discussions this month with key people in the businesses I consult with. Some of them have gone smoothly, and some have become prickly fruits. It’s gotten me thinking about compensation — wondering what is fair when it comes to making a living . . . what you should expect . . . what you should ask for . . . and what you can get if you play your cards right.

I won’t fatigue you with the details of my noodling — but you may be interested to hear the most important conclusions I’ve come to. (If you’re a longtime ETR reader, you will have heard some of them before.)

1. It’s not your starting salary that counts. It’s how much you can make over time.

For example: A recent graduate in electrical engineering will make $50,000 today. That’s pretty much the top of the chart as far as entry-level salaries are concerned. Engineers who work hard will eventually earn more than that, but the average income increase — at about 4% per year — barely keeps up with inflation. (In the past year, salaries for engineers and computer programmers actually went down.) The first-year compensation for a marketing major is considerably lower ($39,000), but the average salary increase — at about 5% — is higher. That means a marketing executive can expect higher overall compensation during a lifetime of work. More importantly, a marketing executive generally has a better opportunity to work his way up to CEO. And the average income for CEOs is significantly higher than it is for engineers.

2. Discover how money is made in your company and become a critical component of that process.

The work my son does is critical to the operations of the business he works for, but he doesn’t bring in the client fees. As a key person in computer engineering, he can expect to see his salary go up so long as he is needed. But the moment he can be replaced with someone else who can do the same job as well for less money, he will be in financial jeopardy. This is not true for someone who generates income for a business. Income producers are not viewed as “necessary costs” that should be, if possible, trimmed or curtailed. Income producers are seen as magicians. By making yourself one of the few people in your company who know how to bring in the bacon, you give yourself the greatest chance of earning big bucks and eventually becoming CEO.

3. Ask for more but don’t demand too much.

Some employees have unrealistic views of what they are worth. Sometimes, when they ask for too-big raises they get them, but only for a while. Don’t make that mistake. Once you’ve priced yourself out of the market — by costing the company more money that you are truly worth — it’s only a matter of time before you will be replaced. (Did No. 1 son make this mistake? I’ll let you know if and when it looks like he did.)

4. Recognize that education pays.

The median salary for a worker with a bachelor’s degree is $46,000. That’s a lot higher than it is for high-school graduates ($29,000) and high-school dropouts ($21,000), but it’s considerably less than for workers with master’s degrees ($55,000). There is also a strong correlation between job stability and education. Last year’s unemployment rate for wage earners with master’s degrees was 1.6%, as compared with a 6.5% rate for high-school dropouts. Of course, these numbers refer strictly to formal education. The benefits of career-oriented education (courses and seminars that teach you how to do your job better) would produce even more dramatic gains.

5. Make connections.

Helping your business grow and prosper is the most important thing you can do, and working hard and smart toward that end is equally important. Improving your job skills with formal and informal education will keep your income rising — usually at rates much higher than “normal.” And getting on good terms with the power brokers in your business and your industry is invaluable too. Don’t be ashamed to make connections. There is a good and practical reason why good workers do so. Connected wage earners solve problems quickly and get better results, because they are connected into problem-solving networks. They have first-name relationships with key thinkers and decision makers.

6. Toot your horn.

If you do all the things I’ve told you to do . . . work hard and smart, keep educating yourself, network, etc. . . . you’ll do fine, because the right people will notice. But just in case they don’t, find some way of publicizing your good work. Better to be thought of as very good but a bit of a hotdog than not to be thought of at all.

7. Have a back-up plan.

You have a right to your own ambitions and your boss has a right to employ you as he sees fit. If the two rights collide, don’t gripe, move on. But don’t go before you’ve taken care of business, cleaned up your workplace, trained your successor, and made sure that all those who depend on you are taken care of. That’s a lot to do, but you can do it if you have a back-up plan. A good back-up plan consists of:

  • a financially valuable skill that makes you a good catch for any employer
  • a small network of employers who like you and would like to employ you
  • a second stream of income
  • adequate savings to see you through a transition
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