6 Mistakes Churches Make When Determining A Pastor's Salary
By: Nicole Cochran June 16, 2016
Performance should be the motivating factor in deciding what to pay your pastor. There are, however, many other factors to take into consideration when determining a Senior Pastor's salary. Far too often, we see churches neglecting to consider one or more of these elements.
[ IF YOU'RE IN THE PROCESS OF GIVING STAFF RAISES, CHECK OUT THIS GIVING GUIDE TO ASSIST THE PROCESS ]
Here are six common mistakes churches are making when paying their pastor.
1. No Clear Job Description
Most people can easily identify what tasks fall to whom on a church staff team. Questions about team finances are addressed by the CFO, problems with a Children’s Ministry volunteer can be handled by the Pastor of Family Ministry, and so on.
What many church staffs lack, however, is a clearly defined written list of each role's job description and objectives. The problem with not having a clearly defined list is all of the subtleties. Yes, you may know the Worship Pastor oversees the order of the Sunday services, but does the Elder Board know that he also spends five hours a week doing hospital visits?
How does this help in the decision of what to pay your pastor?
Keep in mind that in order to accurately evaluate compensation, it is vital that all the specifics are made known about each individual role. Organizational charts are another wonderful way to gain a clearer picture of who does what and who reports to whom.
2. Cost Of Living
Here at Vanderbloemen, our custom Compensation Analyses always take cost of living into consideration. Depending on where within the United States (or even the city) your church is located, the location can drastically affect the cost of goods and services. Taking cost of living into account is very important because it allows for your staff to reasonably afford to live and work in the area.
Cost of living may fluctuate over time as the economy changes so it is necessary to reevaluate this factor at least once a year. If you are bringing on a new team member, take time to compare what the cost of living adjustment is for them as they make the transition into a new place.
It seems somewhat obvious to use tenure as a factor in your pastor’s compensation, but sometimes churches will overlook this major issue. If the pastor has been around for a considerable length of time, they are likely of great value to the church. If your church staff is not receiving raises and room for advancement, they will likely grow tired and frustrated. It’s understandable and necessary to pay the pastor that has been there for 20 years more than someone who has only been there a couple years.
4. Loyalty Overriding Reason
Although tenure is a major piece of the equation, you should not increase your pastor’s compensation solely because of it. This is something far too many churches get caught in. They really like their pastor and he has been there for ten years, but what was once a Sunday showing of 2,000 has decreased to a regular 600-person attendance.
5. Misalignment Of Expectations And Performance
On the other hand, if your pastor is not fully meeting the expectations laid out for him or her, this should be reflected in their compensation and opportunity for advancement. Periodic performance reviews can help to mitigate problems with this and make certain that everyone is on the same page when it comes to roles and duties.
6. Adjustment For Inflation
Similar to cost of living, inflation is a factor that likely changes from year to year and always needs to be reevaluated. Inflation is essentially cost of living, but on a national scale. When evaluating your church staff’s compensation and potential raises, differentiate between raises based on performance and an increase in pay because of inflation adjustments.
It’s important to realize that no factor can be ignored, but all must work together to create a fair compensation package for your pastor and other church staff members. The Board (or whatever group’s role it is to decide compensation) should reevaluate all factors every year. Even seemingly unchanging factors should be considered. Job duties may shift over the year, and of course cost of living and inflation will change. By taking all of the pieces of the equation together, emotionally-driven decisions can be moderated and fair compensation can be achieved.
How can your church avoid making some of these compensation mistakes?
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