Jeanne Sahadi Commentary:
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Are you paid what you're worth?
It's very hard to tell, especially when your company books a handsome profit.
By Jeanne Sahadi, senior writer

NEW YORK ( – Speak about a productive workforce.

In calendar year 2004, the profit-per-employee at U.S. companies was $68,655, up 55 percent from the year before, according to a survey by human capital measurement firm PricewaterhouseCoopers Saratoga.

QuizlaunchTake the quiz
Do you deserve a raise? Before asking, know your strengths and weaknesses.

1. If you left the company, how easy or hard would it be for the company to replace you?
Easy      Hard

This quiz is adapted from Are You Paid What You're Worth?, by Michael O'Malley (Broadway Books, $15).
Middle managers: Did your bonus stack up?
Not every middle manager gets a bonus. But of those who did in 2005, what they got as a percentage of their base grew with income levels.
Income Median bonus as percent of base pay 
Less than $50,000 6.6% 
$50,000 to $59,999 8.6% 
$60,000 to $74,999 9.5% 
$75,000 to $99,999 12.1% 
$100,000+ 16.8% 
Overall median 11.3% 
 Source:  Watson Wyatt

The firm surveyed 133 large companies across industries, each with an average workforce of about 13,000 employees.

True, the sky-high profits of oil companies in the past few years may have played a part in the increase, but there was only one or two firms included in the survey, not enough to skew the results, said PwC Saratoga researcher Jon Burton.

PwC Saratoga also found that for every $100 spent on salary and benefits, the average U.S. company enjoyed $42 in profit, double from the year before.

Of course, not all employees contribute to a company's profits equally.

Human capital and financial management consulting firm Watson Wyatt found that among middle managers, only 12.9 percent received the highest performance rating last year, and another 33.7 percent received an above-average rating.

That means more than half of middle managers received an average performance rating or less.

But in many ways, "even an average employee can dramatically affect the results of the organization," said Watson Wyatt senior consultant Jane Weizmann.

So how do you know if your pay adequately reflects your contributions to your employer's profits?

In many instances, you don't.

If there's one thing that can be said about being an employee, it's that you're at a huge disadvantage when it comes to compensation issues, said human resource expert Lee Miller, founder of consulting firm

Your employer has far more and far better information than you do about how your salary and bonus compare to others in your field, to others in your office, and relative to the company's profits in any given year.

You can narrow the information gap a bit if you're willing to buy salary reports from compensation sources used by actual compensation and human resource directors at Fortune 500 companies.

Not all will allow you to do so – Mercer Human Resource Consulting, for instance, does not. But the Economic Research Institute (ERI) does.

At $200, though, a quick-call salary report from ERI is hardly cheap. But it includes specific salary and bonus information that is updated quarterly and is derived from a host of surveys that are filled out by companies' human resource departments. By contrast, many of the free or inexpensive compensation reports available online use too-general government statistics or salary and benefit information volunteered by employees who choose to fill out an online survey.

The quick-call report will offer you compensation data for your position based on your years of experience, your industry and the place where your company is located. For executive jobs, the ERI data is specific to jobs where you would be responsible for the same amount of revenue as you are now.

For example, according to a quick-call report I requested the week of March 27, an advertising manager working at an ad agency with five years' experience in New York City earns an average salary of $81,391 and an annual average bonus of $4,314. Those at the bottom of the pay scale for that position with the same tenure earn an average of $67,748 plus $3,576 in bonus; while those at top earn an average of $97,039 plus $5,143 in bonus. The average for an advertising manager with 18 years' experience, meanwhile, is $110,635 with a bonus of $7,346.

For much less expensive but still useful information, you can buy a premium salary report for $29 from, which is owned by the same people as ERI. Its data are based on the most comprehensive government statistics for someone with your job and years of experience in your area.

The other way, of course, to assess whether you're being fairly paid is more labor intensive: shop yourself around.

"The only way you're really going to know is to see what you can get elsewhere. Ultimately, that's the real test of your worth," Miller said.

Your current employer assesses you based on what you're doing, but a prospective employer is more likely to see you in terms of your potential contributions. "They don't build walls around you based on what you're doing," he said.

If you find you can get more elsewhere, but you don't necessarily want to jump ship, you can approach your boss in a non-threatening way. For example, Miller said, you might say, "I love it here and I'm not looking to leave. But some people have been contacting me and they're putting up numbers higher than we have here. What can you do to help me get up to market?"

And if you're a top performer, you also might share with your boss this: Watson Wyatt found that companies with the highest percentage of their budgets available for merit increases and promotions outperformed their peers, as did companies that made the largest distinctions in their pay for top performers and everyone else.


See why you may be paid more (or less) than you think

Jeanne Sahadi writes about personal finance for For comments on this column or suggestions for future ones, please e-mail her at Top of page

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