This article is a guest post by Chris Speten. Chris has been the Executive Deacon at Grace City Church in Wenatchee, WA since 2011. He joined GCC in full-time ministry after 14-years in civil construction, international shipping, and regional sales management for a Fortune 500 company.
Essential to building a healthy church staff culture is paying your staff well. Some believe that those who work in vocational ministry should live one step above the poverty line. This perspective is unhealthy, unwise, and unbiblical. The call to vocational ministry is not a call to poverty. I am not recommending excessive compensation, but fair and reasonable compensation for those who have given their lives to gospel ministry. One part of an overall staff compensation strategy that is often forgotten is a plan for bonuses (Specially around Christmas). But how is this done? Who should get bonuses? When should bonuses be given? Here are 6 questions and answers that will guide you in making these decisions:
1. Who Should get a Bonus?
Consider giving a bonus to any staff person who consistently produces outstanding work and exceeds expectations.
2. When Should Bonuses be Given?
Should a person receive a bonus at the end of a large project, at the end of the ministry cycle, or the end of the fiscal year? I recommend waiting until the end of your fiscal year to make sure you’ve made budget. (And if that’s at the end of the calendar year, it comes right at Christmas too.)
3. Should you Budget for Bonuses?
Budgeting for bonuses is a wise plan. Just because you budget for bonuses doesn’t mean that you’re automatically going to pay them. Budget for bonuses and work hard to make your budget so you can reward your staff when the time comes.
4. How much $ Should you Budget?
Consider budgeting 1-4% of your total annual church budget. For example, if you have a church budget of $500,000 and you approve a 2% bonus pool, you would have $10,000 to pay out in bonuses. But how much should each person get? Keep reading…
5. When Should you NOT give Bonuses?
Here are four times when bonuses should not be paid:
- When the church doesn’t make budget.
- When the employee is part-time or contracted.
- When the employee has worked less than a year.
- When the employee doesn’t deserve it. (That seems obvious, but just because one person deserves a bonus doesn’t mean that everyone should get one to be fair. Life’s not fair.)
6. How Much of a Bonus Should a Person Receive?
Here’s the fun part! I know bonuses can seem subjective, so here’s a formula I recommend that you start with to provide an objective baseline:
- Determine who has earned a bonus.
- Determine how to split the bonus pool. Consider 70% for Leadership and 30% for Support. (In our previous example, a church with a total budget of $500,000 that designates 2% to the bonus pool has $10,000 for bonuses. Now split that 70/30.)
- Determine who is in the Leadership category and who is in the Support category. (Leadership should include your pastors and key executive staff. Support includes your non-pastoral and administrative staff.)
- Divide each employee’s salary into the total salary budget in their category. For example, if a Leadership employee earns $80,000 out of $150,000 in the Leadership salary budget, he will receive 53% of the Leadership bonus pool of $7,000. So, he’ll get a $3,700 bonus.
- If a Support employee earns $24,000 out of $90,000 in the Support salary budget, he will receive 27% of the Support bonus pool of $3,000. So, he’ll get an $810 bonus. And so on. (Remember: if an employee is not receiving a bonus, be sure to remove their salary from the salary budget for this calculation.)
This provides an objective baseline for your team to start with. From here, you can modify it for your context. Time to get out a spreadsheet and have fun!
How about you? What works for you? I’d love it if you shared with a comment.
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