At least once a year, you have the wonderful and terrible role of determining raises. Certainly it is wonderful. You have the opportunity to reward people for their hard work and great performance. I love that part of it!
Yet, raises also have a terrible aspect. Charlie and his wife just had another child and they need the money. Susanne isn’t as productive as others in her department, so should she get a raise? Bill thinks his department has outperformed all the others in the church—and so his department should get twice as much as others. Jim was hired in a sub-par rate—should you equalize his pay to others of a similar grade, even though it means a substantial increase? If Amy left us, we would have to pay one-third more for her replacement—how much of a raise should we give her? I hate this part of it!
When it comes to raises, you have to make hard decisions. These decisions are in real time, not in the electronic world of a fantasy football league. You are discussing the economic livelihood of people who you will be seeing for the foreseeable future.
Here are some of the operating principles that I use in determining raises:
- Be as generous as possible. “People are your business.” Love your people by paying them as well as you can.
- Have a salary grid for every major role in the church. Set a minimum and maximum salary for that role, with three points in between. If a staff member is below your minimum point for the role he or she is in, then raise their salary to the minimum point.
- If they are far below that minimum point, it may take two years to get them to your minimum.
- If someone is over the maximum salary according to your salary grid, then don’t give them a raise. Give them a bonus instead. Examine your salary grid on a regular basis to ensure that it is fair. Don’t pay someone more than what you have determined is the fair maximum amount for that position.
- Offer a newcomer a salary based on your salary grid, setting the exact amount based on experience, qualifications, maturity and similar qualifications.
- Separate “needs” from “work.” Have a benevolence fund to help staff with unexpected medical expenses. Don’t pay people more because they have more kids or because they get married. Pay people based on their work, whether single, married, divorced, childless or “Israel with twelve sons.”
There are many other principles that I use in determining salary. These are some of the salient ones.
Be generous in your salaries. “People are your business.”