451: 3 Keys to Developing a Rewarding Compensation Program

Compensation is one of the most tangible ways organizations demonstrate value and care for their people. In this encore episode, we revisit a conversation with Susan Griffith Byers, Founder of Church Compensation Services, to explore how fair, strategic pay practices can strengthen culture and support a flourishing workplace.

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In this episode:

Importance of Rewarding Compensation

• Compensation is both a stewardship issue and a key driver of a flourishing workplace. (02:26)
• It typically accounts for about half of a church’s budget. (02:28)
• Fair and strategic compensation attracts, retains, and motivates staff. (02:32)

Susan’s Background and the Founding of Church Compensation Services

• Over 20 years of compensation experience in global consulting, tech, and healthcare. (02:56)
• Launched Church Compensation Services to fill a data gap for large and growing churches. (03:09)
• Developed the MegaChurch Compensation Survey, now used by hundreds of churches. (03:24)

Compensation Principles for Churches

• Many corporate best practices apply to churches: fairness, equity, defensibility, and clarity. (04:34)
• Introduced the “Compensation One-Two-Three” framework:
  1. Compensation Philosophy – aligning pay approach with mission and vision. (04:41)
  2. Reliable Survey Data – specific, clean data that reflects roles and church contexts. (04:44)
  3. Salary Structure – market-aligned pay ranges that support consistent decisions. (04:47)

Survey Data Best Practices

• Strong surveys include:
  • Clear participation instructions. (06:58)
  • Detailed job descriptions (100+ roles in 20 ministry areas). (08:10)
  • Differentiated data cuts (e.g., by budget, region, attendance). (05:41)
  • Transparent definitions of pay components. (05:49)
  • Compliance with U.S. DOJ Safe Harbor guidelines. (06:09)

Developing a Compensation Philosophy

• Should reflect the church’s context, values, and financial realities. (08:56)
• Two examples:
  • Affluent suburban church: Needed to attract highly educated staff; paid near the 75th percentile. (09:08)
  • Inner-city church: Focused on mission-driven staff; paid near the 25th percentile but offered holistic benefits. (10:03)

Understanding the Competitive Labor Market

• Not all roles should be benchmarked against other church roles. (12:29)
• Examples:
  • Southern California church: Benchmarked production roles against Hollywood talent. (12:37)
  • Silicon Valley church: Benchmarked I.T. and admin roles against tech sector norms. (13:04)
• Defining the labor market ensures appropriate and competitive compensation. (13:39)

Role of Job Documentation

• Essential for accurate benchmarking and fair pay. (13:35)
• Lack of documentation can lead to pay inequities and legal risks. (14:15)
• Fast-growing churches often skip this step, leading to misalignment and inconsistencies. (14:32)

Pay Administration and Compensation Policies

• Clear policies are needed for:
  • Promotions, demotions, lateral transfers, and new hires. (15:10)
  • Bonuses and incentives. (15:40)
• Recommend documenting all pay-related practices in a “compensation handbook.” (15:45)

Peer Groups for Benchmarking

• Peer group selection should reflect purpose (engagement vs. compensation). (16:16)
• For compensation, budget size is the most significant variable. (16:39)
• Suggests comparing with similar or slightly larger churches (8–10 peers) for robust data. (16:52)

Importance and Structure of Salary Ranges

• Salary structures provide a framework for decision-making and equity. (18:10)
• Should reflect job hierarchy, have enough grades for differentiation, and align with the market. (18:29)
• Church Compensation Services provides turnkey solutions for churches that lack internal resources. (18:58)

Common Compensation Challenges in Churches

• New churches often lack consistency in pay administration. (19:23)
• Disparities exist where the same job title is paid very differently. (19:32)
• A costing analysis reveals outliers—those paid too low or too high—and the cost implications. (19:54)

Strategies for Managing Pay Discrepancies

• Red circling high-paid employees (limiting increases, offering bonuses instead). (20:09)
• Gradually raising low salaries over several years by adding 0.5–1% to the salary budget. (20:34)
• Use of a merit matrix to allocate higher raises to low-paid, high-performing staff. (20:58)
• Moving away from cost-of-living increases toward merit-based systems for fairness. (21:41)

Ongoing Compensation Program Maintenance

• Participate annually in the MegaChurch Compensation Survey to stay market-aligned. (21:58)
• Regular updates to salary structures ensure employees can progress and stay competitive. (22:25)
• Ongoing participation supports the broader church community—“good corporate citizen” mindset. (22:14)

Current Compensation Trends

• Regional cost-of-living pressures don’t always align with local salary norms. (23:25)
• “Vacation destination” churches often pay more than the market due to housing costs. (23:29)
• Rising minimum wages can compress salary structures, forcing higher-tier raises. (23:57)
• Rapid salary growth in roles like:
  • Production (20–40% increases). (24:20)
  • Stewardship (30% increase in two years). (24:27)
  • Regional campus roles (due to growing size and complexity). (24:42)

Regional Campus Compensation

• New survey report will focus on regional campuses with data by campus size and structure. (24:57)
• Churches differ in whether campus pastors teach or share responsibilities centrally. (25:13)
• Gathering more granular data to reflect these structural differences. (25:41)

Why Compensation Strategy Matters

• Rooted in biblical stewardship and the principle of reciprocity (“Give, and it will be given”). (25:58)
• Fair, strategic compensation increases staff motivation, engagement, and productivity. (26:21)
• Not all employees give their best—those who do should be rewarded appropriately. (26:37)

Real-World Success Story

• A large Midwest church implemented a custom salary structure and salary offer tool. (27:01)
• The tool standardized internal and external offers, ensured fairness, and improved decision-making. (27:12)

Recap of the “Compensation One-Two-Three”

1. Compensation Philosophy – Align with mission, define market, guide decisions. (27:37)
2. Reliable Survey Data – Tailored, clean, relevant to church roles. (27:40)
3. Salary Administration Structure – Framework for consistency, fairness, and transparency.(27:48)

Susan’s Mission and Services

• Compensation is often overlooked or under-resourced in smaller churches. (28:08)
• Church Compensation Services fills the gap, offering expert help at a lower cost than traditional consultants. (28:41)
• Susan’s passion stems from personal experience—her husband is a pastor. (28:54)
• Website: churchcompensationservices.com (29:43)

Final Thought for Church Leaders

• Church staff and pastors matter just as much as congregants and communities. (29:26)
• Leaders play a crucial role in building strong, healthy churches. (29:33)
• Encouragement for leaders: your behind-the-scenes efforts deeply impact the flourishing of the church. (29:39)

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