Am I a pork belly, or am I a sausage? We're guessing this isn't a question you ask yourself daily, but when it comes to understanding your salary, this odd inquiry could come in handy.
In recent years, employers and HR specialists have come to rely on the market -- rather than internal measures -- to determine employee compensation. Before making any salary offer, employers examine large scale compensation surveys to find out how much other companies are paying for your job. Kevin Hallock, a professor of economics and HR studies at Cornell, says that some jobs have a lot more pay data available, "a receptionist, an introductory plumber, a law associate -- these jobs are well defined, easy to understand, and tend to have more standardized pay." However, there are other types of jobs that give HR departments a headache: the less common jobs where it is hard to find good comparable data, "a job that requires special software capability, specific training or a unique skill," explains Hallock.
To better understand how this affects wages, we can look at the markets for commodities and customized goods. If your job is common or easily definable, you are priced like a commodity, for example, pork belly. Commodity goods are viewed as all alike and thus the market rate is firmly established -- a pork belly is a pork belly is a pork belly. Alternatively if your job is a bit more unique, you are priced more like a customized good, a sausage in this case, and while the market has some influence on your price, your distinct features are more important -- are you spicy kielbasa or lean cut breakfast links? The price of customized goods is much less tightly controlled by the market because it is difficult to compare one customized good to another. Professor Hallock says, "this is where we see salaries diverge -- broadly speaking, there is more room to negotiate pay when the job is less common."
TAKE THE QUIZ: Are you pork belly or sausage?
1. Can you state your job in three words or less?
a. Pork belly: Yes, I am a plumber, administrative assistant, corporate stock trader.
b. Sausage: No, I am a electronic medical records installation specialist.
2. Where you work, are there three or more people that do a job very similar to yours?
a. Pork belly: Yes, I work on a team of five high school guidance counselors.
b. Sausage: No, I am the only international digital business development officer at my company.
3. How many weeks or months of training did you receive to prepare for your role?
a. Pork belly: Two weeks, I got the usual HR rundown and systems how-to’s.
b. Sausage: Three months, I had to teach myself a new proprietary animation software program.
4. Is there a college major or associates degree for your job?
a. Pork belly: Yes, I studied financial accounting. Yes, I studied hospitality management.
b. Sausage: No, I design customized window displays for retail stores.
5. Could your boss do your job if you got sick for two weeks?
a. Pork belly: Yes, my boss was a local sales representative before she was a state sales director.
b. Sausage: No, I do Hispanic community outreach for my organization and my boss does not speak Spanish.
6. Are you part of a union?
a. Pork belly: Yes, I am a set production assistant for movies and TV.
b. Sausage: No, I am a social media editor for my local newspaper.
Your score: If you answered "a" to the majority of these six quesitons then your salary path is pretty much set. If you answered "b" the majority of the time, go forth and negotiate.
“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VABEFORE YOU GO