Peter Henrickson has been the Pacific Northwest District (PNWD) Treasurer, Compensation Consultant, chair of the PNWD Financial Consulting Team, and author of "Financial Management in the Church." In his workshop, Henrickson asked the question, "What kind of employer do you want your congregation to be?" Becoming a good employer entails certain obligations and commitments that a congregation needs to meet. Addressing these issues early lets the congregation to avoid many pitfalls and problems that can arise.
Henrickson explained that most small to midsized congregations have a nonchalant, diffuse work environment lacking clear supervision. There is an expectation of enthusiasm, productivity, and initiative, but at the same time, an instantaneous adherence to instruction. Staff may be working with volunteers with a low tolerance of feedback while staff criticism is often loud and public.
"Every congregation should have a simple statement describing what type of employer they would like to be, even if they do not meet all the goals." Henrickson said. As individuals, we all want to work in a setting where we are fairly evaluated, where outstanding results are rewarded, where there are career opportunities and development with health insurance and a retirement plan. Henrickson asked "Does this describe your congregation?"
There are four basic types of staff. Core staff usually consists of "salaried" and "regular hourly" employees. Additionally there are "casual intermittent" employees and independent contractors. Henrickson detailed the differences between these employment types.
The IRS considers contractors to be employees unless "the preponderance of the evidence" shows that they are really independent contractors. Henrickson gave the example of a bookkeeper who has multiple clients and works out of her home on her own schedule. She is clearly an independent contractor. However, a "contractor" who has only one client, works at the church, on a schedule set by the minister, will be considered to be an employee. This creates an obligation on the part of the congregation to collect and submit taxes and issue W2s.
Salaried and regular hourly employees have longer term advancement and motivation issues that need to be addressed. Congregations should establish pay ranges for positions so that there is a path for advancement for all salaried or regular hourly employees.
There are three factors in assessing where to place an individual in a pay range: longevity (length of time in a position), educational or training achievement, and performance evaluation. If a pay range consists of eight steps, longevity alone should access four to five levels, professional achievement two or three steps, and performance evaluation three to four steps.
Longevity is a factor because performance evaluations by congregations are generally done very poorly. Performance evaluations are often contentious. Some ways to avoid these problems is to assign the task of performance evaluation to a committee and take their recommendation. Performance measurements should be tied as directly as possible to the duties of a particular position.
Vacation and sick leave must also be provided. Sick leave is unexpected and unplanned without forethought. Vacation time is planned with forethought. These days it is common to combine vacation and sick leave as personal leave which is accrued on an hourly basis. For example, the employee accrues one hour of personal leave for every eighteen hours of paid work for the first four years of their employment and one hour per every fifteen hours after fours years. At the end of each year, they can put up to one week in a personal leave account which can be accrued over their employment. The remaining hours would need to be used during the next year after which they expire.
These are some of the issues that congregations need to consider as they increase in size and begin hiring staff. Addressing these issues early in the process can help the congregation avoid many pitfalls and, more importantly, create a healthy work environment.
Reported by Kok Heong McNaughton and Dean Goddette; edited by Pat Emery.
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Last updated on Wednesday, June 22, 2011.
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