Compensation is a matter of good stewardship by the church as a responsible employer . When we view compensation as a justice issue , it is important for a congregation to offer fair compensation to all its staff . The bible teaches us , “ Respect those who labor among you and have charge of you in the Lord and admonish you ; esteem them very highly in love because of their work .” ( 1Thessalonians 5:12-13 ). By doing so , you demonstrate care for the pastor , staff and their families so they can focus on their ministry to care for the people of God . Freedom from financial anxiety fosters a joyful atmosphere , where staff feel appreciated and cared for .
We can also think of compensation as risk management . When church pastors and employees can keep pace with inflation through yearly compensation increases and by receiving salaries and benefits commensurate with their level of skill , experience and credentials , they are more willing to serve for longer periods of time .
Also , providing benefits to church staff and pastors protects the church from unexpected financial expenses in the event of an employee death or disability . Employers might provide a benefits package that often includes a retirement savings plan , life insurance , disability insurance and health insurance . The package might also include a paid sabbatical . Providing benefits such as these contribute to an employee ’ s feeling of security and well-being .
Setting compensation is typically not handled or negotiated by one individual ; it is often the responsibility of a Pastoral Relations Committee or , in larger churches and faith-based organizations , the human resources department .
What constitutes ‘ fair ’ compensation ?
Fair compensation takes into account the cost of living in your area , salaries offered by comparable church-related employers , as well as salaries for those with similar responsibilities , education and experience in the community-at-large . Each candidate ’ s education and experience should be taken into consideration when a compensation package is created .
When considering compensation for a senior pastor , the proposed package should reflect the pastor ’ s value to the congregation . One suggestion is to consider the package provided to a local high school or middle school principal . This person often has the education , responsibilities and experience similar to that of a senior pastor .
When reviewing pay for staff , consider paying at an appropriate percentage of the senior pastor ’ s pay as one approach .
Your church might also want to consider a salary survey , a helpful tool for comparing other churches or faith-based organizations within your denomination or geographic area . A salary survey is a collection of salary and market data . It might include information such as average salaries , inflation indicators , cost-of-living indicators , and salary budget averages . Denominations also conduct salary surveys and publish reports with compensation recommendations for pastors and church staff .
Compensation can be flexible
For example , in the case of a bi-vocational pastor , if your church cannot afford to compensate the minister for all the work he or she is doing , you might want to consider reducing the minister ’ s responsibilities .
Many smaller churches can manage with a part-time or bi-vocational pastor . This is a perfectly viable option , but it is best to set clear guidelines so the pastor and church are aware of the expectations of both time and specific goals for their work .
Regularly revisit , review compensation
Once you have established your staff ’ s compensation , it ’ s important to review the compensation package annually .
At the minimum , staff salary should be increased annually to account for inflation . The Consumer Price Index , or CPI , is generally used to approximate the rate of inflation . The federal government establishes the CPI .
There are also performance-based factors to consider during a salary review . Did the staff person meet established performance goals ? These goals should reflect the organization ’ s ministry . It is important that the goals are realistic and measurable , using objective criteria for staff persons in terms of what each person is able to achieve .
You might also want to consider if the staff person took the job initially at a compensation level that was below market rates . If so , the annual salary review might result in an increase to make up for this deficit .
Church leadership is responsible for paying a fair wage and retaining talented pastoral leadership and other church employees . There are ways to negotiate the total package . Having a solid understanding of the gifts for ministry , and knowing the value your pastor and staff bring to the congregation , are essential elements in negotiating compensation effectively .
Rev . Dr . Perry J . Hopper , associate executive director at MMBB Financial Services [ www . mmbb . org ], oversees all aspects of denominational relations and is responsible for coordinating special programs that support MMBB ’ s mission .
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