Compensation-Setting: Aligning Church Priorities with Market Realities
Compensation-Setting: Aligning Church Priorities with Market Realities
Steps any church can take to set fair, consistent compensation packages.
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Developing a total compensation strategy and plan for your church does not have to be an overwhelming process, but it is a multifaceted one. There are many factors that need to be considered prior to deciding how and what to compensate ministers and other employees.

Often church leaders pattern their pay strategies and benefits plans after the church down the street or a peer church in another city. But this approach creates a cultural and operational disconnect, while also potentially creating unnecessary legal and tax liabilities. A more effective strategy is designing a plan from scratch—one reflecting the church's own unique culture and dynamics while recognizing market realities.

Building such a compensation plan from scratch is possible, regardless of a church's age and current situation. It requires a very intentional process. And it requires collaboration, starting with buy-in from the entire leadership team.

Assess your church's culture

The ability to update and improve the church's compensation philosophy and policy depends upon a clear understanding of your internal culture—taking stock of talent needs and financial resources that will later become important as your church assesses the broader employment landscape. This, in turn, begins the process of mapping out a strategy.

This article is not focused on the detailed process of assessing and analyzing your culture, but do keep one thing in mind here: Do not assume that your church's vision and mission statements or the values of the organization alone represent the culture. These are important pieces of the puzzle for creating it, but how you act as a church matters as much, if not more, than what your church says about itself.

Once there is a collective understanding of the church's culture—its core values and how they parlay into the vision and mission of the organization—leadership can then move forward in developing a meaningful pay philosophy and policy that blends with that culture. For example, what does your church offer that will draw potential employees to it? What are your unique and most attractive qualities? What is it about your mission that sets it apart from other congregations? The answers to questions like these should be written into your policy.

Shape a policy

A good compensation policy should support your church's vision, mission, strategic plan, and key performance initiatives, as well as ministry goals, operating objectives, and, ultimately, a compensation-setting strategy.

The components behind a strong policy should cover details such as:

  • How the church will compensate its employees—identifying the components (pay, benefits, retirement, housing, and so on) that will be offered and explaining how your church will execute the plan.
  • Direction on how to attract people to become valued members of your church staff.
  • Guidance on how to motivate employees to perform at the best of their abilities, skill sets, and competencies.

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