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Is your promotion rational?

April 10, 2018

As I say in my home page, I specialise in working with people who are somehow burnt out in their career and who are looking for inspiration, rest or escape.

 

Many people in the 'old paradigm' of 'get as far and fast up your career ladder as your qualifications and abilities will take you', find that there is much problematic with this strategy.  Certainly, younger people, such as 'Milennials', are more likely to have this kind of attitude:

 

"Millennials have often shared with me their unwillingness to sacrifice their off-work time or to make other lifestyle compromises in return for financial compensation. It’s been argued that millennials’ inclination in this regard relates to them having watched their boomer parents delay happiness in return for career advancement, a worldview they’re not willing to buy into for themselves." (Forbes Jan 2016)

 

The other thing that is worth taking into account is to look rationally at the cost/reward trade-off.  As an economist, I am trained to look at marginal returns, in this case, what cost and reward will you get with an extra hour's work?

 

At the bottom end of the marginal trade-off chart, if you weren't working at all, for the first few hours work per week, you've got lots of time on your hands and no money, so to exchange your time for money, the marginal reward is high (you're getting your Maslow hierarchy needs met), and cost is low, as you've got lots of time to give.

 

As you move higher and higher, your time becomes more precious.  Your free-time between work and sleep gets squeezed and the value of that time increases to you.  At the same time, progressive taxation kicks in.  At a certain rate of pay, (this is for the UK), you'll be paying 40% income tax, National Insurance tax, often a higher tier of pension contribution, you'll be losing child benefit if you get that.  For me, any extra pay above a certain amount attracts a total loss of no less than 86% through these deductions.  So I keep 14p in every £1.00 earned.  At the same time, once I have done a 38-40 hour week, the free time available to me is very precious - time to spend having fun, reading or spending time with my family.  

 

So in thinking like a Millennial, as I tend to, rather than like the generation of my parents, I think about the marginal trade off.  In theory, you should work up to the point where your marginal reward intersects with the marginal cost to you of trading in your time.  So for me, if I worked at a much higher rate than I currently do, I'd get a very low marginal reward monetarily and a high marginal cost in terms of the personal time that I contribute.

 

If this resonates with you and you'd like coaching to explore your own motivations and life purpose, then please get in touch! 

 

 

 

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