Annual salary adjustments

by Ralph Mero (retired), Office of Church Staff Finance

Since 1995 the Unitarian Universalist Association has urged congregations to provide annual salary adjustments for increases in the cost of living index (COL) and for merit.

COL adjustments for 2006 should reflect the 3.4 percent increase in the Consumer Price Index (CPI) for 2005, up from 3.3 percent in 2004. Employees who don’t receive a wage increase of 3.3 percent for 2006 will be falling behind in purchasing power this year. (Looking ahead, the change in the CPI is expected to drop to 2.8 percent over the next twelve months.)

Merit increases come on top of any COL adjustments and should reflect an employee’s growth in skills, productivity, expanded responsibilities, and worth to the organization. Merit adjustments often range from two to five percent and should follow an annual assessment of how an employee is performing in his or her role. Such assessments or evaluations should themselves be linked to up-to-date job descriptions that will have clearly identified the duties and responsibilities of the position for the year just past.

So for effective compensation management, the sequence should be:

1. An annually updated job description with the staff member’s input. This should indicate the amount of time required for various duties.
2. A performance assessment with written evaluations by the worker and the supervisor, plus an honest conversation.
3. An annual cost of living adjustment based on economic factors.
4. A merit increased based on growth in performance and the individual’s contribution to the organization.

It is often difficult for church staff to advocate for their own compensation. That is why the UUA has a cadre of district compensation consultants available to work with local churches at no charge to the congregation. Staff persons can do their job by initiating an updated job description that may list activities of which the employer is unaware.

Fair compensation isn’t about charity. It’s about appropriate pay for valuable staff, and it helps employers avoid the expense of recruiting and training new employees to replace those who have moved on to greener pastures.

For more about how the UUA compensation program is put together, see http://www.uua.org/leaders/leadership/benefitscompensation/compensation/20472.shtml.

For further information about staff compensation, go to Church Staff Compensation or http://www.uua.org/leaders/leaderslibrary/compensation/index.shtml