Billions of people throughout the world are paid for their work. This book was written to demonstrate why they earn what they earn and, in doing so, to help them understand how they can earn more in the short run and even more in the longer run. There are many ways pay is determined across a wide variety of organizations, from for-profit firms, to nonprofit organizations, to government agencies. By the time you finish reading this book, you will know how a well-run organization takes its overall strategy and converts that into a system for properly paying people. Then you can apply the lessons in the book to your own organization and take actions that can lead you to earn more.

But how difficult can this be? All we are trying to do is consider how and why people are paid the way they are paid. It turns out that this is difficult, but I will try to show you why firms and other organizations do what they do, and with this help, you will hopefully understand how you may be able to better navigate work and consider some things you can do to earn more. Many firms set pay on an ad hoc basis and, frankly, they don't really know what they are doing. Many others have sophisticated systems in place for how to set pay within their organizations. There are many variants to this latter approach, and I highlight these as we go through a basic system that is essentially used by most organizations.