Penny Foolish, Pound Wise

Taking the risk of being short-changed is a good way to get ahead in the long run

When you’re an employee, you exchange value with your employer: time/effort/talent in exchange for pay. If you don’t meet expectations, you get fired -- simple enough. On the other hand, if you exceed expectations, let’s picture that the surplus value you create gets added to an imaginary account.

On the surface, it would appear that any positive balance in that account accrues to your employer: you create “extra value”, they pay you the same, thereby they get a deal. Viewing the situation this way leads some people to make a point of never going above and beyond, on principle. I’ve even heard this view expressed as advice -- that it’s foolish to do more than the bare minimum required to earn your paycheck. Okay then.

That view is wrong, and here’s why: in the long run, most or all of the surplus value in our imaginary ‘account’ actually accrues to the doer. By exceeding expectations and building up a balance of goodwill over time, you end up as the primary reaper of rewards, in a few ways.

Let’s say you’re gunning for a promotion. More than likely, you won’t get it just by meeting expectations for long enough. Or if that’s not true -- let’s say you work somewhere that does customarily reward “meets expectations” -- you better hope that no one around you has been outshining you. In either case, the promotion goes to someone who’s been exceeding expectations. Think of it as having a price tag, and you needing to ‘buy’ it with the balance in your surplus-value account.

Or maybe you want your employer to look upon you favourably at raise or bonus time... In that case, you’re looking to make the usual trade of value for cash -- only, after the fact. If you’re carrying a zero balance in your account, you’ll probably be fighting an uphill battle.

Of course, both of those scenarios -- where you make the first move in offering more value -- involve your employer holding up their end of the bargain, i.e. recognizing your contributions and doing the ‘right’ thing in returning the goodwill to you in some way. Where I see people get hung up sometimes is on the risk that the employer doesn’t seem to act in good faith -- overlooking you for the raise, bonus or promotion despite you having invested more of your energy than you otherwise needed to. You might feel pretty burned if that were to happen.

Still -- I’d argue that the value of your efforts accrues to you, even in that scenario:

  • By that point, you’ve built up a body of work that you’re able to show off if / when it comes time to look for the next job.

  • If you’ve accumulated a bunch of goodwill with your current employer, you’ll probably be able to secure a glowing reference to increase your odds of landing a great next opportunity.

  • An abstract but no less important one: along the way, you will have built the mindset and discipline to give more than you take, which likely gives you even more leverage than either of the previous things.

Zooming out, back to our vigilant friends who deliberately choose to run a zero balance in their surplus-value account, hell-bent on not offering an ounce more energy than they’ll be paid for. This seems to me to be a textbook example of “penny wise, pound foolish” -- right up there with driving across town to save $0.50 on a tank of gas. If your primary concern is on minimizing the apparent risk of short-term exploitation, you’re very likely forfeiting a ton of big-picture value for yourself in the process.

By the way, you can extend this analogy beyond the workplace, to anywhere that you exchange value with people. You can approach these exchanges with a scarcity / zero-sum mindset -- where your #1 goal is to make sure you don’t get taken advantage of -- or you can approach them with an abundance / positive-sum mindset, where your focus is on what you can do for others, even at the risk of being short-changed on occasion. By choosing the latter approach and taking that risk, you won’t have to worry in the long run about getting the things you want.