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What Higher Paid Employees Know That Most People Don’t

Name: What Higher Paid Employees Know That Most People Don’t
Uploaded: 2022-05-08T15:47:56+00:00
Duration: 44 s
Channel: Shanli Liu, CPA, CTP
Description: In this short monologue, the speaker explains that the highest‑paid employees are compensated primarily based on their output rather than a fixed salary…

8 May 2022 · 1 min

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In this short monologue, the speaker explains that the highest‑paid employees are compensated primarily based on their output rather than a fixed salary. He defines variable compensation—pay that fluctuates with performance, such as sales commissions—and describes Management by Objectives (MBOs) as a structured way to tie specific, measurable goals to bonus payouts. Concrete examples illustrate how a project manager might earn extra money by meeting predefined targets, each with a dollar value. The core message is that high earners focus on maximizing variable pay and MBO bonuses rather than relying on base salary alone.

Chapters

Something that higher paid employees know that you might not. The highest paid employees know that they are paid on output. Output can look like multiple things. One is having variable compensation, means you're paid based on your performance. An easy example is a salesperson. You can say they get 5% or 10% of every sale. That's variable compensation. For any kind of employee, they can have something called MBOs, which is management by objective. So say that you are a project manager. The goals that you might come in with are set up the new project management system, manage these 4 contracts through the end of the year, and set up this new URL. And so say you have those 3 goals. One is worth $4,000, $10,000, one is worth $6,000, the other one is worth $5,000. And if you hit each one, each one, you get that much extra money at the end of the year. And that is how the highest employees are paid. They don't care as much about base salary. They care more about what's my variable comp or what are my MBOs.