In North America, we live in a wage-based society where individuals sustain themselves and plan for the future based on expected income. Church employees live in that same society.
While nothing is ever guaranteed, it is important for church employees to have fair compensation and knowledge of how and when that compensation can change.
Just as churches teach people to be good stewards in their finances, churches should also be good stewards in their compensation.
Here are some best practices for church employee compensation:
1. Minimize the Salary Gap
One of the measurements used to determine the equity of a pay system is the salary-gap between the person at the top and the other staff.
Universities are the worst offenders. This Chronicle of Higher Education article points out that in some schools the President of the University is compensated 10 times more than the best paid faculty members. On average Presidents make 3 to 4 times more.
Churches should never allow such pay-gaps to exist. If a senior pastor is earning more than double or triple what other pastoral members are earning, the pay scale is unjust. A senior pastor’s pay should be determined by the same salary-metrics as the other staff. More on those metrics in a minute.
2. Use an HR professional
Most small to medium size churches run just like small to medium size businesses in which a few staff wear many hats. This can result in someone managing the payroll and benefits who knows more about leading youth services than Human Resources.
It’s better to secure the services of a knowledgeable HR manager than a willing student pastor.
Good HR management does not require a church to hire an HR director. There are HR agencies who do human resource management for small businesses and non-profits. These agencies can serve churches very well.
The benefits of using a human resources management company go beyond making sure payroll gets out on-time. The growing complexity of healthcare services can often be better managed for church employees by an HR agency.
Never treat people’s benefits as perks.
Too often churches behave as if health and disability insurance or retirement plans are perks that employees should be grateful to have. These services are the employee’s benefits not the church’s. If employees have questions about their benefits or want to make changes, they should receive prompt service and sound advice. Often times an HR agency is better equipped to provide that level of service.
3. Develop a Job Classification Worksheet
Churches can be inequitable when it comes to determining pay for employees. Many churches determine pay grade using the three “F’s”: family, favorite, and faithful.
A person’s pay increases the more “F’s” they get (go figure). Family is paid better than a favorite, and a favored employee is paid better than a faithful employee. If you can achieve being a faithful-family-favorite then you’re the next pastor.
The truth is faithful-family-favorites don’t always make the best employees when it comes to productivity and responsibility.
A job-classification worksheet, like this one, can help a church avoid operating with all the dysfunction of a family dynasty. This kind of salary-metric uses a point system to determine an employee’s rate of pay based on predetermined categories.
Employee compensation should be based on the position’s influence, required levels of responsibility and budgetary oversight plus an employee’s education and experience. A person with five direct-reports and a budget of several thousand dollars should be compensated more than a person with one direct report and hundreds of dollars.
A clearly defined and consistently followed compensation plan goes a long way to create a healthy work place for church employees.