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Is a Higher Calling Enough? Incentive Compensation in the Church

  • Jay C. Hartzell
  • Christopher A. Parsons
  • David L. Yermack
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    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. (c) 2010 by The University of Chicago. All rights reserved.

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    File URL: http://dx.doi.org/10.1086/652461
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    Article provided by University of Chicago Press in its journal Journal of Labor Economics.

    Volume (Year): 28 (2010)
    Issue (Month): 3 (07)
    Pages: 509-539

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    Handle: RePEc:ucp:jlabec:v:28:y:2010:i:3:p:509-539
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    1. Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988. "Compensation And Incentives: Practice Vs. Theory," Papers 88-05, Rochester, Business - Managerial Economics Research Center.
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    7. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    8. Alex Edmans & Xavier Gabaix & Augustin Landier, 2009. "A Multiplicative Model of Optimal CEO Incentives in Market Equilibrium," Review of Financial Studies, Society for Financial Studies, vol. 22(12), pages 4881-4917, December.
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    14. Brickley, James A & Van Horn, R Lawrence, 2002. "Managerial Incentives in Nonprofit Organizations: Evidence from Hospitals," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 227-49, April.
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