Is a Higher Calling Enough? Incentive Compensation in the Church

40 Pages Posted: 19 Nov 2008 Last revised: 28 Feb 2010

Jay C. Hartzell

University of Texas at Austin - Department of Finance

Christopher A. Parsons

University of California, San Diego (UCSD) - Rady School of Management

David Yermack

New York University (NYU) - Stern School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: February 8, 2010

Abstract

We study the compensation and productivity of more than 2,000 Methodist ministers in a 43-year panel data set. The church appears to use pay-for-performance incentives for its clergy, as their compensation follows a sharing rule by which pastors receive approximately 3% of the incremental revenue from membership increases. Ministers receive the strongest rewards for attracting new parishioners who switch from other congregations within their denomination. Monetary incentives are weaker in settings where ministers have less control over their measured performance.

Keywords: Compensation, Incentives, Churches, Religion

JEL Classification: G30, J30, J33, J45

Suggested Citation

Hartzell, Jay C. and Parsons, Christopher A. and Yermack, David, Is a Higher Calling Enough? Incentive Compensation in the Church (February 8, 2010). Journal of Labor Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1303853 or http://dx.doi.org/10.2139/ssrn.1303853

Jay C. Hartzell (Contact Author)

University of Texas at Austin - Department of Finance ( email )

1 University Station B6600
Austin, TX 78712
United States
512-471-6779 (Phone)
512-471-5073 (Fax)

HOME PAGE: http://www.mccombs.utexas.edu/faculty/jay.hartzell/

Christopher A. Parsons

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

David Yermack

New York University (NYU) - Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~dyermack

Paper statistics

Downloads
508
Rank
31,428
Abstract Views
3,469