💰 Rewards: What You Get in Return

It's time to talk Money...and not just Salary and Compensation

Photo by Giorgio Trovato on Unsplash

Over the past two weeks, I've explored Catalysts and Achievements. This week, we're diving into the final leg of the Vital 9: Rewards: what you get back in return. Yes, it's time to talk money!

This isn't just about your salary, though, or even your current total compensation. What you earn at a given point in time is important, but real rewards are about what you accumulate over a longer period of time, both in terms of your personal financial status, and your earning potential.

When I'm coaching people they often think about a target salary that they're looking to achieve. Often it's a milestone that they want to hit. Or they've been tempted by a new role - with a nice pay increase.

I’ve found it’s always best to think broader and longer term.

- What if you don’t hit that milestone salary? Can you adjust your spending so that you get a lot of the benefits anyway now?

- If you get this pay increase make any meaningful impact on your longer term financial plan?

- If you take this new role - what will be the impact on your market value? (do you think you'd be worth more or less than if you stayed in your current job for another year)

The two Rewards ingredients

Given this, need to think a bit broader and longer term than just your salary - the two ingredients I’ve defined for Rewards are..

💰 Financial Progress How your career supports your personal financial goals through salary, bonuses, equity, and total income. And, how you manage that income to create stability, security, or freedom.

📈 Market Value Your future earning potential. How likely your career trajectory is to lead to better-paid, higher-impact opportunities, based on the signal your track record sends about what you're worth next.

The second you start thinking about these two things, you realise there are two dependencies.

1. You need to have some longer term financial ambition and a clear plan about how you'll achieve it. A plan that covers what you earn, what you spend, and what you save and/or invest.

2. You need to both be aware of your current market value; and think about what you need to do in order to improve it.

There's a lot to unpack in these two ingredients, so Let's dive into some FAQs to get into the detail of this..

Q: How to 'Rewards' relate to Catalysts and Achievements?

In a dream scenario, there's a linear progression. You work in a great environment; you achieve a lot; and then you get well rewarded.

Unfortunately, work often doesn't deliver on dream scenarios. You can also easily find yourself in a situation where you're achieving a lot but not getting the rewards for it (especially if the business you're working in is going through a tough time/ or just not a great payer). In which case you will really need to ask whether you are prepared to accept this, of if you’re going to move with a prime focus of improving your Reward level.

It's also - as improbable as it may seem - sdpossible to be doing well on Rewards without Achievements, but I'd always question about how sustainable this can be.

Q: How do I start thinking more strategically about Financial Progress?

A: I could give you a whole dissertation on good financial practice (get rid of debt, build up an emergency cash fund, and invest sensibly and consistenly), but I'll cut it to the chase and say this. If you don't know where to start: speak to an independent financial adviser (ie: someone who's there to advise you, not just sell you stuff). And the earlier you do this the better. I've done this for the last 20 years - and really recommend having someone to work with to help you think longer term about your finances.

Q: How do you define Market Value?

A: Market Value is what you're worth in the job market right now. There's no simple formula, but there's a clear set of factors: where you've worked, the current level of demand for your specific experience, your level, your trajectory (how rapidly you've been advancing), and your current compensation.

As with any value, though, it's really about what someone is prepared to pay. If you take it to an extreme: Meta is currently paying (literally) millions for AI researchers from Open AI and Anthropic because they tick all of the boxes above.

A personal (and much more humble) example of how market value can rise and fall: when I left Amazon Video, I found I was very valuable to Sky. At that point in time, having someone join from Amazon was deemed to be massively valuable and they paid me handsomely to join.

On leaving Sky, five years later, I was keen to move out of media, and my trajectory had been pretty flat. In addition the stuff I'd been working on wasn't really in demand. So I found out quickly that market value had taken a bit of a battering.

Q: How do Financial Progress and Market Value relate to each other?

A: As with all the Vital 9 ingredients' they're loosely coupled. You can have them both, or neither or just one. But there is a pretty standard pattern as you go through your career.

Early on, it's likely you'll find it hard to be making any meaningful financial progress (and frankly you're way too busy having fun to bother about it), but you will want to focus aggressively on improving your market value.

This means working at organisations that others want to hire from; continuing to step; and - as we discussed last week - that you keep your achievement levels up.

As your career progresses and you hopefully have more income in, you would hope that you start making more financial progress, but your market value may actually be static or even going backwards. (This, by the way, is exactly what happened to me during my stint at Sky - the drop in my market value was more than compensated for by the Financial Progress I'd made during my time there).

Q: How do I assess my Market Value?

A: The only true test is to put yourself in the market every couple of years, even when you're happy. Value can shift depending on what's happening broadly in the markets and the demand (or lack of!) for your particular experience.

This isn't about constantly job-hopping - it's about staying calibrated to your worth and maintaining relationships.

One thing to realise is that your market value can often be very independent of how you're doing in your job. A low-to-average performer at somewhere hot, you might well be much more valuable than a star at somewhere not so hot. It shoudn't be the case, but it often is.

But even before you do this - there's a good set of lead indicators of your value: specifically how often you're getting approached for

Q: What if I sense my Market Value is actually less than I'm currently earning?

A: Short term answer: make sure you're doing everything you can to use your current earnings to make as much financial progress as possible.

Longer term answer: ask yourself

1) Is there something I can do in my current company to improve this? Or..

2) Do you need to take a sideways move to a new role/ organisation in order to get back momentum? Or..
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3) (especially if you're 50+) you might have to accept you've now hit peak earnings - in which case, I go back to my first point...about making the most of the earnings you've got.

Next Week: Putting It All Together

We've now covered all nine ingredients of a successful product career. Next week I’ll talk in a bit more detail about the assessment tool I’ve been building - and some of the result patterns.

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Want to assess your own Rewards and build a strategic plan? I'm building tools to help you evaluate your Vital 9 and develop an action plan. [Join the beta programme here] for early access and a discount.