When the Pay Plan Speaks Louder Than the Mission
Aligning compensation with compassionate care, employee well-being, and a culture of trust in funeral service
By Jay Jacobson
Imagine a funeral director finishing an arrangement conference late on a Thursday afternoon.
The family arrived with questions, a limited budget, and the weight of a loss they were still trying to understand. She listened. She explained their options. Together, they planned a modest gathering that reflected the person who had died.
They declined several additional items. She respected those decisions and continued helping them with the same attention she had offered when they first walked through the door.
Before leaving, a family member paused.
“Thank you. You made this easier.”
For the funeral director, that mattered.
Then, at the end of the month, she reviewed her incentive results. That arrangement contributed little toward her bonus. The family had purchased fewer additions and selected less expensive services.
She knew she had served them well. She was less certain whether her employer considered the arrangement a success.
This imagined moment raises a question every funeral home owner should be willing to examine:
Does your compensation package reinforce your organization’s mission, values, and culture?
The Message Inside the Pay Plan
A mission statement might promise compassionate care. Organizational values might emphasize integrity, respect, and service. An owner might tell employees that every family deserves the same attention, regardless of what they spend.
But employees also learn what matters through compensation decisions.
They notice which results earn a bonus. They notice whose contributions lead to advancement. They notice whether mentoring a colleague receives the same consideration as selling a premium service package.
Management scholar Steven Kerr examined this disconnect in his foundational article, On the Folly of Rewarding A, While Hoping for B. Through organizational examples, he described reward systems that encouraged behaviors different from those leaders said they wanted.
Funeral service leaders should consider whether a similar contradiction exists in their businesses.
If we ask employees to honor a family’s wishes, but reward them primarily for increasing the arrangement total, we create competing messages. The employee must decide how to reconcile them in a conversation that requires trust.
Our intentions may be sincere. The experience of the person working under the plan may still be difficult.
Three Perspectives on the Same Incentive
The employee’s experience
An employee may feel proud of helping a family and disappointed by the financial outcome at the same time.
That tension can become personal.
“Did I do the right thing?”
“Will my manager think I missed an opportunity?”
“Can I afford to keep recommending simpler choices?”
An employee with household expenses may feel caught between professional judgment and financial needs. Another may become frustrated that careful preparation, mentoring, and dependable follow-through receive less recognition than an upgrade.
Some employees may welcome sales incentives and view them as fair recognition of their effort. Owners should hear those perspectives as well.
The question is whether the compensation arrangement allows every employee to exercise sound judgment without feeling financially pressured to favor a more expensive choice.
The family’s experience
Families deserve to understand the services and merchandise available to them. A keepsake can hold considerable meaning. A gathering can provide an important opportunity for remembrance.
Explaining those possibilities is part of thoughtful service.
The concern arises when recommendations continue after a family has expressed its wishes, or when a simpler choice receives less attention and encouragement.
A family member may begin to wonder whether spending less means doing less for someone they loved. A person already worried about money may feel embarrassed to decline another option. Relatives may disagree about purchases when those decisions become associated with love, duty, or remembrance.
The family may leave with a question that never appears on an evaluation:
“Were they helping us choose, or encouraging us to spend?”
These are possible experiences to investigate through listening and feedback. They should not be assumed to describe every family or funeral home.
One practical measure of respect is what happens after a family says no. Does the conversation remain warm, attentive, and helpful?
The organization’s experience
Compensation can also influence how colleagues work together.
If individual arrangements determine individual rewards, employees may become protective of assignments. Helping a colleague may feel less worthwhile when the financial benefit belongs to someone else.
A newer employee may learn that arrangement totals carry more weight than the service principles discussed during orientation. A long-serving employee may question whether the organization still values the work that initially drew them to it.
Owners should watch for these risks without assuming they are inevitable.
The deeper concern is a widening gap between the culture leaders describe and the culture employees and families experience.
What the Research Supports
Research offers reason to examine these incentives carefully.
In a randomized laboratory experiment involving insurance advice, Max Beyer, David de Meza, and Diane Reyniers changed advisors’ compensation incentives. Those changes substantially influenced consumers’ willingness to purchase coverage, even though advisors were prohibited from lying.
The finding matters because influence does not require an openly false statement. Incentives may affect the emphasis, reasoning, and recommendations within a conversation.
Research by Daylian Cain, George Loewenstein, and Don Moore also found that financial conflicts could bias advice. Disclosing the conflict did not reliably protect the people receiving the advice and, under the conditions studied, could increase the bias.
Transparency deserves attention, but leaders should not assume it resolves a poorly aligned incentive.
Performance targets introduce another concern. Maurice Schweitzer, Lisa Ordóñez, and Bambi Douma found that participants with unmet goals were more likely to misrepresent performance than participants instructed to do their best. The effect was particularly strong when participants narrowly missed a goal, and it occurred with and without financial incentives.
These studies were not conducted in funeral homes. They do not establish that merchandise bonuses cause misconduct or measure how grieving families experience such plans. They support the underlying concern that incentives can influence advice and behavior. Applying those findings to funeral service requires thoughtful examination of our own practices.
Financial Sustainability and Compassionate Care
A funeral home needs sufficient revenue to compensate employees, maintain facilities, invest in equipment, and remain available to its community.
Owners have a responsibility to understand costs, establish sound pricing, and help employees understand the business.
The question is how those responsibilities are carried out.
An arrangement conference should allow an employee to explain appropriate choices clearly, respect the family’s decisions, and provide excellent care. A lower total should not automatically mean lower-quality performance.
Owners can build compensation practices that recognize financial stewardship alongside service, judgment, and teamwork. Research reviewed by the Chartered Institute of Personnel and Development emphasizes fairness in performance pay and suggests that combining individual and team achievements may be more effective than relying on either alone.[5]
No single compensation formula will fit every funeral home. The following steps offer a practical starting point.
Ten Steps Toward Better Alignment
1. Make base pay dependable
Review pay against responsibility, experience, skills, and actual workload. Include on-call coverage, removals, supervision, and administrative demands.
Establish written pay ranges and explain how employees advance. Review existing employees when increasing starting pay for new hires.
An employee should be able to recommend an appropriate, less expensive arrangement without depending on an upgrade to meet ordinary household expenses.
2. Review what each bonus rewards
Identify incentives tied to merchandise, premium packages, or average arrangement totals.
Ask whether those rewards create pressure to favor a particular family decision. Consider redirecting the incentive budget toward service quality, reliable preparation, follow-through, and team contribution.
Explain a replacement plan before changing compensation. Employees deserve to understand how they can succeed under it and what the transition means for their income.
3. Define values through observable behavior
“Shows compassion” leaves considerable room for interpretation.
Describe the behavior: listens without rushing, checks understanding, explains options clearly, and respects declined purchases.
Do the same for integrity, teamwork, and stewardship. Recognize accurate explanations, prompt reporting of mistakes, complete handoffs, and improvements that prevent waste without diminishing care.
Share the expectations in advance. Evaluate specific examples rather than relying on a manager’s general impression of who has a “good attitude.”
4. Listen to families without turning feedback into another sales target
Ask questions that reveal the experience:
Were options and charges explained clearly?
Did you feel comfortable declining services or merchandise?
Did we follow through on what we promised?
Did anything make you feel pressured?
Consider feedback alongside observations and records. Review patterns over time.
Avoid paying employees for obtaining five-star reviews. That can encourage selective requests and place another obligation on families who are grieving.
5. Recognize the whole team
Excellent service depends on arrangers, transfer personnel, embalmers, administrative staff, attendants, and others whose work may receive little public attention.
If you establish a team bonus, define the budget, eligibility, goals, and distribution method. Shared goals might include dependable handoffs, completed training, and implementation of a useful improvement.
Avoid an all-or-nothing arrangement in which one incident eliminates everyone’s reward. Examine what happened and who could reasonably influence it.
6. Pay for growth and continuing responsibility
Create clear opportunities for increases or stipends tied to mentoring, supervision, relevant technical skills, and ongoing improvement work.
Provide paid time for assigned training and mentoring. Make advancement available to employees whose strongest contributions happen behind the scenes.
Learning and helping others learn should have a visible place in the compensation structure.
7. Compensate demanding assignments directly
Establish clear arrangements for on-call coverage, added responsibilities, and difficult scheduling demands.
Build usable time off and reasonable recovery into staffing plans. Recognize dependable coverage without making constant availability the measure of commitment.
If family is an organizational value, employees should be able to care for their own families.
8. Recognize specific contributions promptly
Set aside a modest budget for contributions beyond ordinary expectations.
For example:
“Your complete handoff helped the weekend team honor the family’s requests without asking them to repeat difficult information. We appreciate that preparation.”
A recognition award, development opportunity, or additional paid time off can accompany that acknowledgment.
Apply consistent criteria across roles. Recognition should not become a popularity contest or a reward for routinely working beyond reasonable expectations.
9. Protect honesty and learning
A bonus for “zero reported errors” may discourage employees from bringing problems forward.
Instead, examine whether employees followed procedures, reported concerns promptly, helped correct mistakes, and contributed to improvements.
Distinguish an honest mistake from misconduct and from a staffing problem outside the employee’s control. Employees need to know that reporting a concern is part of responsible service.
10. Test the plan and invite feedback
Pilot revised criteria before making them permanent. Where practical, evaluate the proposed measures before using them to determine pay.
Check whether managers assess the same behavior consistently and whether every role has a reasonable opportunity to succeed.
Ask employees:
“Does this plan recognize the work that helps families and colleagues most?”
Use what you learn to revise the plan.
Begin With One Honest Question
Place your mission statement beside your compensation package.
Then ask:
Can an employee serve a family exceptionally well, recommend a less expensive choice, and still be recognized as successful here?
Consider the answer from the employee’s perspective, the family’s perspective, and the organization’s perspective.
Look at bonuses, advancement, schedules, benefits, and performance conversations. Identify one contribution your organization says it values but currently leaves unrewarded.
Make that contribution visible. Define it clearly. Compensate it fairly.
Leadership is not declared; it is lived.
Your compensation package helps employees understand what that leadership means, and helps families experience the care your mission promises.
References
Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management Journal, 18(4), 769–783.
Beyer, M., de Meza, D., & Reyniers, D. (2013). Do financial advisor commissions distort client choice? Economics Letters, 119(2), 117–119.
Cain, D. M., Loewenstein, G., & Moore, D. A. (2005). The dirt on coming clean: Perverse effects of disclosing conflicts of interest. The Journal of Legal Studies, 34(1), 1–25.
Schweitzer, M. E., Ordóñez, L., & Douma, B. (2004). Goal setting as a motivator of unethical behavior. Academy of Management Journal, 47(3), 422–432.
Chartered Institute of Personnel and Development. (n.d.). Performance-related pay.
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