Business Odyssey 099 For years, I have been trying to convince fellow church leaders to act as graciously toward those who serve the church in a paid capacity as they can within the bounds of ethics and sanity. This isn't necessarily a financial affair. There  are many ways to act graciously toward ministers. Pay is one. But, other things are equally or more important. It's important that churches work hard to serve those who work hard to serve the Kingdom.

This are many reason for this. Among them are: 

1) The church, of all places, should be a wonderful place to work on a daily basis.

2) No matter what they want to believe, churches with attendance over about 100 rely on ministers more than they want to believe.

3) Ministerial turnover is inevitable, but high or unnecessary turnover hurts churches more than they want to believe. 

4) I'll take my chances before the Lord being too kind or generous, than too stingy. 

5) In my experience, there tends to be a correlation between the way a church treats it's paid servants and the way they treat non-paid servants. Those who treat staff poorly tend to treat volunteers rather poorly as well. Hence, the small percentage of people serving in the church–the famous 80/20 rule. In some churches, the rule is 90/10. This is not usually not the result of having "too much" staff. It's usually quite the opposite. It's usually the result of an attitude that also leads toward a lack of or poor treatment of staff and volunteers alike. Show me a church where staff morale is high, and that church's unpaid servants will typically have high morale and are plenty. Churches where there is low staff turnover tends to have lower volunteer turnover as well. It's not a coincidence.

Below is an article from Kiplinger's Personal Finance Magazine showing how this is found true in the business world. The church is not a business. Actually, it's standards of treatment of people is far higher. More on this tomorrow.


From Kiplinger's Personal Finance magazine, June 2009

Alex Edmans is assistant professor of finance at the Wharton School, University of Pennsylvania.

How did you conclude that happy employees lead to higher stock prices?
My work uses the 
Fortune magazine study "The 100 Best Companies to Work For," which is compiled by an independent institution. The survey tries to get at the intangibles of employee satisfaction — feeling respected, participating in decisions, enhancing self-esteem. From 1999 through 2008, the returns on portfolios based on these companies have beaten the market by an average of four percentage points a year.

Wouldn't you expect that?
If you stopped the average person on the street and said, "A new study finds that companies whose workers are happier do better," they'd say, "That's obvious." But it's not. The old view was that satisfaction was a bad thing. Every dollar given to employees was a dollar taken away from shareholders. If you spent on a corporate gym, you were not spending on dividends.

So why is employee satisfaction good for shareholders?
Because it leads to motivation, retention and, ultimately, productivity. A hundred years ago, motivation wasn't a problem. People worked in factories and produced widgets, and each widget was worth 25 cents. People were motivated to work hard because they were paid according to their output.

Now, companies look to engage their employees. Satisfied workers bring in new business, mentor subordinates, recruit people and encourage teamwork. If workers intrinsically feel that they're part of a team, they're like sports fans — they live and die by their team and evangelize about it.

We're at nearly 10% unemployment and layoffs are the law of the land. Can companies afford to cater to workers now?
I think the economic instability might actually increase the benefit. Firms that retain and motivate workers despite current conditions will have an even greater edge.

How can investors profit from your findings?
The market doesn't take intangible assets — such as employee satisfaction, advertising, and research and development — into account the same way it looks at, say, cash flow. So companies with strong intangibles are undervalued, representing good bargains.