Article | Journal of Labor Economics | July 2010

Is a Higher Calling Enough? Incentives Effects in the Church

by Christopher Parsons, J. Hartzell and D. Yermack

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: Motivation and Incentives; Organizations; Religion; Performance Evaluation; Compensation and Benefits;

Citation:

Parsons, Christopher, J. Hartzell, and D. Yermack. "Is a Higher Calling Enough? Incentives Effects in the Church." Journal of Labor Economics 28, no. 3 (July 2010): 509–538.