What should your salary be?

The person who asked me this question is smart, there's no doubt about that. But if an MBA doesn't know how to price his contribution to the employer, imagine how clueless the rest of the population is.

(Click on the picture above to see my answer to the gentleman).

"Marginal contribution" essentially is the amount of money that you bring into a company. Any employer, therefore, would be willing to pay you a salary below the amount of money that you will generate.

For example, if you're a sales rep, and you can prove to the company that you can generate $200,000 in revenues per year, then that is your marginal contribution. You then have the right to ask for a salary of $60,000 to $80,000.

Even if the "average salary" for a sales rep, according to surveys, says that you should only get $50,000, you can still negotiate for a higher amount IF you can prove to the employer that you can generate the marginal contribution of $200,000.

I have personally always found salary surveys to be ridiculous. Yes, they can give you a basic idea of the range in which you should negotiate your salary, but ultimately, it's your negotiation skills that will secure the salary you want.

Here's an example to illustrate what I mean.

Imagine a husband coming home to his wife. He goes: "Honey, I read a survey on marital bliss in GQ magazine, and they found that wives about your age usually make love to their husbands at least 4 times a week. So could you please get rid of that apron and join me in the bedroom so we can, you know...?"

I don't know much about women, but I don't think such a wife would respond positively! (Unless the husband is Brad Pitt. But then again, Brad Pitt wouldn't have to cite any survey!).