Advice for the Annual 
Pastoral Review Committee

Thank you for agreeing to serve on a very important committee of our church.  You and others on this committee are charged with an important task.  The Board of Elders is responsible to annually “review the adequacy of the compensation of the pastor.  The process for this starts with you!  Your committee will then make recommendations to the Council, which in turn will make recommendations to the congregation.  

Reviewing the pastor’s salary is different from any other salary review in our culture.  Think about your own salary and how it is reviewed.  
•	Does everyone you work with know your salary?
•	Does everyone you work with have a vote on what your salary will be for the coming year?

It is indeed different!  How does this committee go about this task?

First, understand your task.

The Congregation requires that the adequacy of compensation be reviewed.  That is your primary task – are we paying the preacher fairly?  In our culture, compensation reviews are tied to performance reviews.  All of this means you have a difficult task.

Let’s think about why this task is difficult.

You are being asked to review someone’s performance whose work is outside of your area of expertise.  Usually, people’s performance is reviewed by people in the same field.  A teacher’s work is reviewed by other educators, such as a principal – not by the students.  A police officer is reviewed by someone trained in law enforcement.  A soldier is reviewed by someone in the military.  But you probably have no training as a pastor, and yet you have been asked to review a pastor’s work.  

You may not have a clear understanding of what a pastor does during the day.  It is difficult to review someone’s work when you have no training in that field.

You are being asked to review someone’s performance whose work is often unseen.  A teacher is observed by a principal or other supervisor.  But how often have you observed the pastor conduct premarital counseling, visit in a hospital, or visit a shut-in?  

The task is difficult, but not impossible!

Step One:  Do a Collegial Review

One of the common mistakes made in the annual review of the pastor is that people approach it in terms of a supervisor reviewing an employee.  After all, that is the experience most of us have in our own annual reviews.  Most of us are reviewed by our bosses.  If we conduct any performance reviews in our work, it is with people who are employed by us or who work under us.  

The review of a pastor is not a review of someone who works “under” you, but “along-side” of you.  You are not the pastor’s boss or supervisor.  You are a colleague in ministry.  

So as a first step, take a collegial approach.

The Board of Elders should meet with the pastor and ask questions such as these:

1.	How are you and your family doing?  Are there any joys or concerns you would like to share with our committee?
2.	Have there been any changes in the financial needs of your family this past year?
3.	What were some of the goals that you had for your family last year?  How did the Session or church interfere or assist you in meeting those goals?
4.	What are some of the goals you and your family have for the coming year?  How can the church be helpful in allowing you to meet these goals?
5.	Did you take all of your vacation this year?  
6.	Did you take your continuing education leave this year?  What did you study?
7.	How are you growing as a Christian?  How can the church help nurture you so that you can nurture us?

The second step is a performance review.

This is difficult, because as we’ve said, you are must review someone whose work is outside of your own training and experience.  There is much the pastor does that you do not witness.

Most importantly, review the pastor – not the congregation.  “We’re not growing,” might be a valid comment, but is that due to the pastor’s work or is it because the Church Council or the Congregation has voted down every proposal the pastor has made regarding evangelism and church growth.  

“We don’t have a strong youth group anymore,” might be true, but is it due to the pastor’s work or is it because all of the youth group graduated last year and the church has a gap of in the age group of teenagers this year.

As you review the pastor’s work, stay focused on the pastor.

How does your committee evaluate the pastor’s work?  It might be helpful to do these three things:

1.	Ask the pastor for a self-review.  This may be something that you have to do in your own annual performance review.  By asking the pastor for a self-review, you will realize some of the important accomplishments and challenges of this past year.  
2.	With the pastor, review the main points of the stated job description.  Using the job description will keep your committee on track and prevent your committee from basing a review on goals or expectations that were never expressed.  Unfortunately, using the full text of the job description will prove impossible.  How can you evaluate ministry to shut-ins or to hospital patients if you have never witnessed this important task?  Therefore it is best to stick to a few main points.
3.	If the previous annual review stated any goals for the coming year, you can review these goals.  Were they met?  
4.	Set some reasonable goals for the coming year.  Remember to make them reasonable and focused on the pastor’s work.

Step Three:  The Compensation Review

Nothing about your task is easy!  Understanding the salary package of a pastor sometimes takes a tax lawyer.  You may have a simple, straight forward salary package in your line of work.  Perhaps you have a salary or an hourly wage.  You may have benefits as well.  Whatever you receive at your work will be different from what the pastor receives.

Let’s review the pastor’s salary.

First, there will be salary AND housing.  A minister does not simply make a salary.  A portion of his or her income from your church is designated as housing.  Why?  Two reasons:
1.	Some churches provide an actual house called a manse or parsonage.  For these ministers, the actual cash income is less.  Having the compensation packages of all ministers broken down in terms of cash salary and housing helps ministers and churches compare apples to apples rather than apples to oranges when studying and reviewing various compensation packages.
2.	It is a tax benefit to the pastor to have a portion designated as housing.  Our tax laws are not equitable, but they attempt to be fair.  Pastors pay income tax, social security and medicare taxes on salary, but on housing they pay only social security and medicare taxes – not income tax.  This tax advantage helps balance out some of the particular tax disadvantages experienced by ministers.  For example, you probably don’t pay income tax on your employers contribution to Social Security, but pastors do.  

If this sounds complicated, relax – no one understands all the tax laws of our nation.  All you need to understand is that the money you give your pastor must be designated into two categories – salary and housing.  It will make no difference to the church how this is divided.  It will, however, make a great deal of difference to the pastor.

Second, there are professional expenses.  This is not income. It is not.  It is reimbursement for expenses incurred in doing the work you and your congregation require. The church needs to be sure that it provides for these expenses so that the pastor does not have to use salary, which should be used for his or her family’s needs.

Third, there are benefits.  The cost of retirement plans and medical insurance is based on a formula.  What you pay in salary and housing will determine the cost of benefits.  There are, however, some optional benefits, such as additional retirement plans, dental insurance, etc.

The Step By Step Guide For The Meeting
Of The Annual Review Committee

I.	 THE COLLEGIAL REVIEW
Questions for the pastor to answer before meeting with the Annual Review Committee:
a.	How are you and your family doing?  Are there any joys or concerns you would like to share with our committee?

b.	Have there been any changes in the financial needs of your family this past year?

c.	What are some of the goals you and your family have for the coming year?  How can the church be helpful in allowing you to meet these goals?

d.	Did you take all of your vacation this year?	If not – why not?  

e.	Did you take your continuing education leave this year?  What did you study?

f.	How are you growing as a Christian?  How can the church help nurture you so that you can nurture us?

II.	THE PERFORMANCE REVIEW
a.	 Ask the pastor for a self-review.    
i.	What are some of the accomplishments you’ve achieved this year that gives you great satisfaction and joy?

ii.	What were some of your failures or short-comings and how might the Church assist you in these areas for the future?

iii.	What are some of the accomplishments you’ve achieved during your ministry with us over the past several years?

iv.	What were some of the significant challenges or difficulties you faced in your work this year?

b.	With the pastor, review some of the main points of the stated job description.  The Committee might use the pastor’s job description, but this usually proves too difficult – how can a committee evaluate counseling, wedding services, or shut-in ministry when the committee members may never have witnessed these important tasks?  A simpler process might be to rate the following from 1 (for poor) to 5 (for excellent).

Pastor:
Spiritual leadership of the congregation			1  2  3  4  5
Participation in the life and mission of the congregation	1  2  3  4  5
Sermon preparation and delivery				1  2  3  4  5
Worship leadership						1  2  3  4  5
Pastoral duties							1  2  3  4  5
Supervising the staff of the church and academy		1  2  3  4  5
Assuming the duties of staff positions during vacancies	1  2  3  4  5
Ministry of weddings, baptisms and funerals			1  2  3  4  5
Availability to members						1  2  3  4  5
Participation in Circuit and District LCMS			1  2  3  4  5
Participation in community ministry 				1  2  3  4  5
Overall performance as Pastor					1  2  3  4  5

c.	If the previous annual review stated any goals for the coming year, you can review these goals.  Were they met?  

d.	Set some reasonable goals for the coming year.  Remember to make them reasonable and focused on the pastor’s work.

III.	THE COMPENSATION REVIEW
a.	Does the pastor find the compensation adequate?

b.	Has the congregation honored the terms of call for the past year?  If not, what has it failed to honor?

c.	Would the pastor like to redefine how much of the income is designated as “housing”?

d.	Are the optional benefits adequate?  Would the pastor like to submit any requests for additions or changes in these programs?

e.	Does the church properly reimburse the pastor for the cost or expenses of the ministry?  What changes are needed?

Some things the church can do to support its pastors

1.	Pray for the pastor.
2.	Do not treat the spouse or children as staff members – but treat them as church members.
3.	Pay the pastor, for the workman is worthy of the hire (I Timothy 5:18)
4.	Provide an annual Cost of Living Adjustment.  This should be an almost automatic action each year.  It preserves the purchasing power of the pastor’s salary.  It is also good for the church so that the congregation can “keep in the market’s price range” should the pastor leave and another one must be called.
5.	Give a Merit Raise when deserved.  The changes in the pastor’s salary should be designated in two categories – Cost of Living Adjustment and Merit.  If Merit is deserved, give it.
6.	Provide time for days off and vacations.  The Devil never takes a day off or a vacation, so if you want your pastor to be like the Devil, then keep him or her from taking days off or vacations.
7.	Support the pastor in times of trouble.  Is the pastor’s father gravely ill?  Give extra time for the pastor to travel and be with his or her father.  Was the pastor’s spouse disabled this year?  Help make the pastor’s home handicap accessible.
8.	Provide a Sabbatical Plan.  Every 5 or 6 years, churches can provide a Sabbatical of 30 to 90 days.  Pastors can use this time to refresh themselves from the often lonely and difficult work of ministry.  Pastors might engage in a pulpit exchange in order to see another church and another part of the world.  Sabbaticals promote healthy and long-term ministries in our churches.
9.	Provide for Continuing Education and professional development.  Keep your minister’s sermons fresh and the work of the pastor vital.  Make the pastor take time for professional development.  Give time and funds for that task.
10.	Provide a scholarship program for the pastor’s children.  Let the pastor’s children go to church camp without charge.  Help the pastor’s child go to college with an annual contribution to a scholarship program.
11.	Match contributions to a retirement savings plan.  In addition to a required pension plan, there are 403(b) plans and other additional retirement savings plans for the  church.  Set a budget plan for matching the retirement savings of the pastor.  Your church might contribute up to $600 or $1,200 or other specific amount as a match to what the pastor saves.
12.	Provide for the cost of a vacation.  Does someone in your church own a motel?  Work on a cruise line?  Own a cottage at the lake?  Donating this time and space to the church for use by the pastor can be a tax break for the donor.
13.	Give gifts that are meaningful.  A gift certificate to treat the family to an expensive restaurant, or to shop at a favorite store.
14.	Don’t gossip!
15.	Finally, do unto the pastor as you would have the pastor do unto you!