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Performance-Based Compensation for Pastors

Performance-Based Compensation for Pastors

June 05, 20243 min read

Is Compensating Pastors for "Good Performance" a Good Thing?

So, a senior pastor successfully grows their congregation by 20% this year and is rewarded with a bonus based on some predetermined set of parameters related to growth. Good for the pastor … good for the church … good for the kingdom?

A campus pastor successfully launches a campus ahead of schedule and under budget. The church compensates the pastor to reward good performance. This is a good thing, right?

Hmmm … I’m not so sure.

Of course, it seems so when things turn out well, as in the above examples. But what happens when the senior pastor fails to grow the church or the campus pastor isn’t ahead of schedule and under budget? Of course, they don’t receive their reward.

“I’ve seen them come, and I’ve seen them go” when it comes to Performance-Based Compensation Programs. This “incentive-based compensation” was very common in corporate, especially at the executive level. Of the 3 or 4 executive-level positions I occupied in my corporate days, all of them had at least some part of the performance-based compensation package (bonuses, stock options, annual increases, etc.).

Here’s the thing, though. In the corporate world, a vice president or other executive has the authority to make part of their income variable. By variable, I mean compensation increases when they do well and decreases when they don’t do so well. In other words, at least, for the most part, the corporate executive can “call the shots” in their own part of the business, such that they actually have some control over the outcome. In the church world, … definitely not the case.

On a church staff, either the senior pastor or the eldership calls the shots. Basing compensation on performance with the rest of the staff is great when everything is heading up and to the right. Take compensation away, though, when things are flat or trending downward, and you’re done.

I remember from my days as a Manufacturing Engineer, a guy had a poster hanging in his cubicle. It said, “Due to a shortage of robots, workers here are human beings and may act unpredictably if abused.” This is a very relevant message on this topic.

Take pay away when things don’t go well and see what happens. If you’re fortunate, they won’t stick around for too long. If not, they’ll stick around but won’t be doing you any good if you’re catching what I’m throwing.

Oh, and by the way, when you offer a bonus to a staff member, and they don’t receive it, they will view it as “money taken away.” Count on it …

By the way, I’m not suggesting that how most churches are led is somehow wrong. Quite the contrary, I’m in favor of the senior pastor calling the shots. A staff-led model or structure with oversight from an eldership works well and is biblical. I am suggesting, however, that performance-based compensation in the church doesn’t work.

Of course, this is just my opinion. If you’ve had another experience in the church, please comment. I’m sure there are some examples out there to the contrary.

Founder of Executive Pastor Online, passionate about what Jesus calls us to do through the local church.

Kevin Stone

Founder of Executive Pastor Online, passionate about what Jesus calls us to do through the local church.

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