How to Avoid Losing $125 Million Dollars
The Importance of Benchmarking Compensation
In Numerically Small and Medium – Size Churches
By: Robert L. Withers
On September 30, 1999 CNN carried the following item:
“NASA lost a $125 million Mars orbiter because a Lockheed Martin engineering team used English units of measurement while the agency's team used the more conventional metric system for a key spacecraft operation, according to a review finding released Thursday.”
“The units mismatch prevented navigation information from transferring between the Mars Climate Orbiter spacecraft team in at Lockheed Martin in Denver and the flight team at NASA's Jet Propulsion Laboratory in Pasadena, California.”
“Lockheed Martin helped build, develop and operate the spacecraft for NASA. Its engineers provided navigation commands for Climate Orbiter's thrusters in English units although NASA has been using the metric system predominantly since at least 1990.”
Utilizing different systems of measurement resulted in mission failure for NASA. How often does this occur in the pastor – church relationship in the area of compensation?
Small and mid-sized churches constitute the majority of churches in North America. In certain regions, such as New England, weekly attendance of 200 is considered well above average. We often use the small or medium size of a congregation to determine a pastor’s salary – but does this really make sense and is it equitable to the pastor and is it spiritually healthy to the congregation?
A threshold question to ask in such situations is, “What do teachers, with comparable levels of experience and education in the local school system receive in pay and benefits?” Don’t forget that teachers typically are provided retirement accounts and that they do not pay self-employment tax. Most parishioners and many folks on pastoral relations committees are unaware that clergy are typically considered self-employed for IRS purposes and are therefore responsible for paying self-employment tax.
After obtaining teacher salary information then consider that teachers typically have about two weeks off during the Christmas season, often a spring break, and then an extended summer break. (If you are a teacher reading this, I know that you put in many long hours during the semesters and that you often work during your breaks. I also know that you are typically underpaid).
If you have a M.Div. then you and the pastoral relations committee should recognize the fact that a M.Div. is usually about 96 credit hours, while a typical Masters degree is 32 credit hours. You should also acknowledge that an M.Div. requires more credit hours than an average Ph.D. Obviously the Ph.D. has the challenging dissertation component as well as other elements, and it is not my intent to equate a M.Div. with a Ph.D., but it is my purpose to demonstrate that a M.Div. falls between a typical Masters degree and a Ph.D.
Therefore, if pastor and church leadership are reviewing pay scales for public school teachers and see that a Masters degree provides X additional dollars of compensation and that a Ph.D. entitles the teacher to Y additional dollars of compensation, they can reasonably conclude that based on the pastor’s M.Div. that he or she should be closer to the Ph.D. scale than the Masters scale.
Other factors to consider when benchmarking compensation are the general economic environment of a community and the socioeconomic makeup of the congregation. Keep in mind in terms of the latter that many blue collar workers enjoy high hourly wages with overtime and excellent benefits.
It is likely that other professionals in a community, such as doctors and lawyers, earn salaries commensurate with their education and experience.
Now you may be thinking, “What is the point of all this if the church can’t pay the pastor a salary commiserate with her education and experience?”
The primary point for pastors and pastoral relations committees is to educate the church. By educating the church regarding a pastor’s education and experience, by discussing the compensation packages of teachers when appropriate, the pastoral relations committee is establishing a benchmark and a framework for future salary discussions. Even if the church cannot provide its pastor with a best-case compensation package, the committee and the pastor will have established what a best-case package should look like and will have hopefully set the stage for the future.
If a candidate does not value himself;, the candidate shouldn’t expect others to value him. If a search committee does not value its candidate; it should not expect the congregation to value its candidate selection.
If the search committee does not value its candidate’s education, experience and calling; it should not expect the congregation to understand the importance of these in the candidate. If the candidate does not value her education, experience and calling; she should not expect others to value them.
If you are a member of a search committee or a pastoral relations committee, even if you genuinely cannot provide your pastor with a compensation package that is in line with his education and experience – acknowledging that will go a long way with your pastor! Which of the following would you prefer to hear?
“We are small, offerings have been down, we’ve got lots of repairs we need to make to the building, other churches aren’t paying any more than we are offering you, this is really the best we can do.”
“We recognize that you have valuable education and experience and we deeply appreciate your sense of calling. We know that this package falls short of what it should be in terms of base salary and benefits. We hope you will work with us on this and please know that it is our sincere intention to improve your compensation package.”
When church leadership treats its pastor equitably it enhances a congregation’s spiritual health by strengthening the pastor-church relationship, and by encouraging both leadership and congregation to be faithful in tithing and generous in heart. The financial constraint of many small and medium-sized congregations isn’t really about attendance; it is rather about congregational obedience to tithing and generosity. The same can be said about all North American congregations, including mega churches. Studies indicate that North American Christians give between 2 – 4% of their income and that 9% actually tithe. Educating ourselves and our congregations about tithing is a challenge we all face.
I don’t think I have ever met a pastor who didn’t tithe. Many pastors are among the largest givers in their congregations. This is not because they make the most money; it is because they are often one of the few members who actually tithe.
If you are a pastor or church staff member, I take it for granted that you at least tithe on your gross income – you cannot expect from others what you don’t do yourself.
There are few areas in which tension and misunderstanding can arise as in the area of compensation and benefits. Candidates and church leadership often fail to have charitable, informative and frank discussions; the candidate may be using the metric system while church leadership is working with English measures. The result of two systems of measurement will likely be conflict after the pastor – church relationship is launched and could result in mission failure. Had NASA’s and Lockheed Martin’s engineers used the same system of measurement they would have had a successful mission and avoided a $125 million mistake.
Benchmarking compensation creates a meeting of the minds between the pastor and church leadership. This in turn reduces the likelihood of future misunderstanding and fosters shared goals and expectations – and a successful mission!
One man gives freely, yet gains even more;
another withholds unduly, but comes to poverty.
A generous man will prosper;
he who refreshes others will himself be refreshed.
Proverbs 11:24-25 NIV
Copyright © 2009 Robert L. Withers, all rights reserved
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