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When it comes to ministry-related job positions, many people don't want to admit the importance of the compensation plan being offered, yet it remains a vitally important element in attracting and retaining qualified employees. For many managers, compensation systems remain shrouded in mystery. Here's how to implement a formalized pay and benefits plan.

A formalized pay plan makes good business sense because it allows an employer to:

• Attract, hold, and motivate sufficient numbers of qualified employees to perform the work of the organization.
• Control compensation costs so that they are neither too high nor too low.
• Avoid charges of pay discrimination by disgruntled employees—an occurrence more common today than ever.
• Assure that differences in pay from one job to another are equitable.
• Assure that jobs requiring greater amounts of skill are, in fact, compensated more than jobs requiring lesser amounts of skill.
• Reward employees objectively for meritorious performance.
• Establish job sequences and lines of progression.
• Improve morale by reducing the likelihood of friction and complaints over perceived compensation inequities.
• Deal on a factual basis with compensation questions raised by employees.

A formalized compensation plan establishes an objective means for reaching decisions on pay. Moreover, it provides a sound basis for explaining those decisions to employees. The absence of a well thought-out pay plan usually leads to employee dissatisfaction, perceived inequities concerning pay, and ultimately to increased employee turnover.

Ideally, an organization ought to have a written compensation plan when it hires its very first employee. While the plan for one or a few employees should not be as formalized or detailed as a plan for a larger organization, it should cover essentially the same ground. Realistically, by the time an organization has ten distinct jobs—not employees, but separate jobs—it is ready for a compensation plan that includes a point system for evaluating jobs as well as other more formalized policies and procedures.

The steps for implementing a salary administration plan are essentially the same for any organization, large or small.

Analyze existing jobs and write detailed descriptions of duties and responsibilities for each job to be covered by the plan. Because subsequent steps depend upon the accuracy of the job descriptions, this first step is crucial.

Have current job holders complete a comprehensive questionnaire concerning their duties and responsibilities. Then interview each employee to obtain additional information and clarification of job functions. Finally, write job descriptions and revise them until everyone concerned is satisfied that the descriptions are accurate reflections of the jobs.

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