by Cheryl Ronk, CAE, CMP
President, Michigan Society of Association Executives

As the Lansing State Journal and Towne Courier demonstrated this weekend, association compensation is not understood. Whether the entity represents public employees or not, compensation is a function of the organization. The leadership of the organization is responsible for the budget and financial health of an organization. Now, especially in times when members need the services of the organization, some associations are working under deficit budgets. They are making the decision to serve their members and keeping cost low. Some are even giving pay increases to keep their best employees.

Ed Ura, MSAE’s consultant for compensation issues, reported he recently read research results indicating that more than 60% of employees plan to leave their current employers as soon as they possibly can, and that turnover is expected to rise dramatically once the economy gets better, especially within organizations that had to cut pay. Ura historically has advised against cutting pay directly, and prefers finding a way to fix inequities within current payroll levels that cut payroll costs overall while still keeping the best employees. The other value of these plans is that every position is benchmarked to current pay levels.

MSAE is going to work with Ed this spring to create a structured compensation plan. I don’t know if it would stand up to media scrutiny, but I suspect it would to member inquiries. If you want to join me in learning about this type of program that many of the larger associations have incorporated, let me know.

My goal is to have the Form 990 contain a description of the program, and MSAE will be able to issue a statement like this:
“All of our employees, including our executives, are paid according to a structured program that takes into account the contribution of their jobs to the organization, the pay of employees in comparable organizations, and their individual performance. The philosophy of the organization and the compensation plan is to provide compensation that allows us to hire, motivate and retain the employees we need to serve our members, and limits compensation so that it cannot become excessive, or out of line with the value people can provide to our members. The program was developed and is maintained by an outside, disinterested organization. Each year, a Compensation Committee of the Board of the organization, composed of Directors without management participation, reviews the report of the outside firm, measures the performance of the organization and the top executive against pre-established standards, and determines whether adjustments are justified.”

The unfortunate reality is the labor market for association executives and staff is often very different than the market for their members. Compensation opportunities must be set appropriately for each organization, and clearly defined.  Compensation decisions must be made in an environment that takes into account not just facts, but perceptions. Failure to properly do so may mean that you’ll be seen as wrong – even when you’re really right.

If you are interested in more information, contact Cheryl Ronk, CAE at 517.332.6723.