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Wednesday, April 05, 2006

How Much Bonuses Should Churches Pay?

CompensationSeth Godin had a great post recently about money and employment... think how this could/should/would apply to churches and the way they pay church staff.  Seth says:

A. "It's not about the money."

Usually, when people say this, they are lying.

Except, it turns out, at work.

Money, it's been shown time and time again, is a demotivator. I'm not talking about a fair or even generous salary. Being a cheapskate is no way to find a great employee. But once people have joined your team, incremental money--bonuses and the like--usually demotivate people. They demotivate because sooner or later, people feel as though they're being treated unfairly.

One guy gets a $10 bonus. The person sitting next to him seethes for weeks, while the bonusee forgets it soon enough.

A sales rep gets into a fight about a commission... and remembers it long after the moment is gone.

People who really and truly love their jobs are in every single industry. And people who do great work because they love their jobs are paid at every salary level. What they have in common is a boss that gives them respect and freedom and responsibility. A boss that listens when they have something to say. Which, not coincidentally, is exactly the way the best companies treat their customers, too.

Cutting your prices doesn't build customer loyalty, and paying a bonus doesn't build employee loyalty.

If I had money to spend on a bonus, Mr. question writer, I would invest it in allowing each of my employees to try a small project (Google style) with no strings attached. Giving fairly-paid people your trust and the freedom to grow is worth a lot more than $50.

---interesting thoughts... what do you think?

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April 5, 2006 in Personnel Issues | Permalink

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Comments

I'd still like a bonus if I've earned it. I've worked in situations where bonuses were handled in a way that they were VERY motivational.

;-)

Posted by: Peter Hamm | Apr 5, 2006 3:05:24 PM

It's sort of like... "Why does it bug me so much that no one in our former congregation did anything to show "pastor 'Appreciation'" either in October or any other month.

I didn't care for me, but it frosts me that they work the staff to their deathbeds and think a paycheck far less than what Arby's pays hourly is being a blessing to them.

Breathe, breathe.... rant over...

Posted by: Jeff | Apr 5, 2006 3:37:54 PM

Whoa! Tough subject - especially in a church context. I've worked in places where bonuses were actually tied to performance (either the individual employee's or the company's) and in places where they were tied to little more than the economy and what bonus you got 6 months or a year ago - that was the worst! The church I worked at didn't do "bonuses", per se, but did a special offering in early December as a "staff Christmas gift". The distribution of that was calculated by some complex algorithm I never saw, but took into account length of employment more than just about anything else.

I think that was a pretty good plan for a church. I'm torn with performance-based salaries and bonuses in church because of the questions about what constitutes good "performance". (We've already discussed that here at MMI a few weeks back.) The "Christmas gift" idea gives the congregation an active role and it removes the performance factor; the algorithm should remove any personal bias that is inevitable (as I've experienced) from asking managers to determine how much each of their staff should get.

Posted by: Randy Ehle | Apr 5, 2006 4:48:29 PM

I'm with Seth on this one. First off I firmly believe that you pay someone what they're worth. If you want great Godly leaders, you pay a great Godly leader salary. I believe scripture teaches the Pastor to love the ministry so much he/she'd do it for free. Scripture also tells the church that those same people are worthy of double honor.

SO on one side you have a person with their heart right about ministry who would do it for nothing but you have a congregation on the other side who so appreciates the role of the shepard that they would be willing to pay double. What you find in the middle is a worthwhile salary and an appreciative staff member. Too many churches use poor measurements to decide how much to pay a person.

To me a bonus isn't needed if a staff member makes a competetive wage. Instead, give the staff member an opportunity to take a risk for the sake of their ministry.

With all of this I think it's wise to set up an account for the Pastor to provide retreats and gifts to the staff throughout the year. In this case however I'd simply give an equal budget to all of the staff who report directly to the Senior Pastor.

Just my 2 cents.

Posted by: Tally | Apr 5, 2006 7:03:38 PM

Actually I like a bonus - here's my bonus story: I was a young employee in the professional theater arena; working my way up by doing any and everything I could to gain experience and make a living. We produced "Death of a Salesman" -NOT a huge box office draw because of the subject/tone of the play (it's a bit of a downer), but a fantastically written one nonetheless.

On my own inititative I developed and wrote a teacher's study guide and a student study guide and the group sales director was able to market it to schools and we had lots of schools attend which was the thing that made the play finish in the black. I received a $50 bonus at a staff meeting and it was one of the proudest moments ever. Only one other time did someone get a bonus in my four years at the theater. That bonus made me want to do more and better for my bosses and the company.

It's sort of the same way in church work (hubby is a worship leader). We usually get a bonus at Christmas but try to never expect it. He makes a fair wage (does anyone who is really passionate about and devoted to his job make what they're worth?), but we ain't living high off the hog. That bonus is awesome and we are humbled and greatful every time he receives it, no matter the size. And I like to think that it is because he puts his ALL plus 100 into everything, especially around the holidays.

I would always assume that a bonus is for exceptional work, over and above work, and be totally glad for the person recieving it.

Maybe bonuses (bonusai? bonsai?) are just handed out too frequently and are devalued.

Posted by: Abbey | Apr 5, 2006 7:36:25 PM

I highly recommend the book, "The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want" by David Sirota, Louis A. Mischkind, and Michael Irwin Meltzer. This book contains extensive research that indicates most employees (and this would apply to the church as well) begin their jobs as highly enthusiastic. It also delves into the dynamics related to maintaining motivation in those employees rather than getting in the way and destroying the initial motivation. It also addresses the subject of bonuses in a very novel way. Get the book and read it; better yet, try their ideas.

Posted by: Dean | Apr 5, 2006 9:50:48 PM

Well. My dad always taught me this. He grew up on the farm plowing with horse's. He always told me to always treat people like he did them. Because if you don't take care of them pretty soon they die.

I have never served as a pastor yet/staff yet and don't intend too. But I have been a leader in the Army, public work place, and in my own business.

Whenever we worked a big job and worked our backsides off. It was time to pay them back a little extra for their efforts. I wouldn't give them money, but one time in the Army, I bought beer and pizza for everyone. Man they never forgot that one. The troops told our 1 Sgt/Commander/XO that they would walk through the BAD PLACE on a Sunday, spit in the devil's eye and whip the tar out of him for Corporal Ruble. When asked what they'd do for the Platoon Sgt. "WE'D ALL SHOOT HIM AT THE SAME TIME"

Well anyway... I'd say since time's are hard now's day and money is tight. I'd say give them a Kroger Gift Card for $50-$60 for groceries, a Wally-World card for the same amount to buy something they needed like shoes, clothes, etc...

Point is.. Pay them by meeting a need in their life.

Posted by: Clairvoyant 1 | Apr 5, 2006 11:32:27 PM

NEWS FLASH...

Motivated pastors…those who work 60+ hours a week and produce...

Go for the bucks and bonus...

http://pastorphill.typepad.com/phillip_longmire/


Posted by: phill | Apr 6, 2006 1:05:00 PM

Just a word of warning: sometimes churches pay cash bonuses, Christmas gifts, etc. Make sure that gets appropriately reported for tax purposes. Yes, they are generally considered income. And no, I'm not a tax guy - though I served on our church's business committee for six years. We found ourselves in a rough spot once because we discovered that two years earlier we hadn't included the staff Xmas gift in income. The gifts ranged from $50-$500, I think.

After checking with several tax experts, we were faced with two options: (1) pretend the whole thing never happened; (2) amend our W-2 and 1099 filings for all employees (some who no longer worked there)...meaning that most of them would also need to amend their tax returns for that year. Of course option 1 really wasn't (or shouldn't have been) an option - "to him who knows the right thing to do and does not do it, to him it is sin". My term on the church board ended in the middle of this, so I don't know exactly what the final result was, but I believe the church did the corrections. We had also talked about covering at least part of the cost of any employees who decided to amend their returns, though I don't know if that happened.

Posted by: Randy Ehle | Apr 6, 2006 1:17:51 PM

Good points. As a former M.Sgt. in the Army...bonuses did not happen. Motivation and rewards came other ways: 3 day passes, awards (those pretty ribbons soldiers wear; and sometimes a special lunch/dinner for a job well done.

As a pastor...love offerings for a special anniversary are common. Sometimes I receive a gift card. I remember as a young congregant we had a pastor who expected the bonuses...even in lean times...and not for going above and beyond.

It is a tough issue. We did away with the "annual Christmas bonus" because it was not linked to performance "over and above" as we felt that the bonus may be better served as an increase in some part of the pastoral compensation.

Posted by: Dan Moore | Apr 6, 2006 2:41:10 PM

Our church gives us a Christmas bonus which is another weeks worth of pay. Personally I think the best way for a church to give a bonus is give a day or two more of vacation. Or if a Associate has worked real hard that week give them an extra day off. Many pastors live away form the siblings, parents etc,and more vacation would be a big help.
This is also a good way to give a raise when a church can't afford to give a pay raise.

Posted by: Jade | Apr 6, 2006 3:51:10 PM

Oh great-- deleting my posts again with no warning or notice...

Posted by: Bernie Dehler of FreeGoodNews.com | Apr 6, 2006 11:39:56 PM

Bernie,

Sorry, but I was in bed sound asleep when you posted your last sarcastic comment. I believe you are mistaken; your last comment was not on this post, but rather on the Communion post.

Never deleted your post, in other words. I have, however, replied to your comment on the proper post.

Todd

Posted by: Todd Rhoades | Apr 7, 2006 5:47:55 AM

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