smiling methodist

Why is this man smiling? Now we know!

ANOTHER idea I’d not thought of: according to a new study, the Methodist church gives its ministers an incentive payment for bringing in more congregants.

Of course, not all ministers avoid self-interest in their work.  But this seems to be making the matter overly explicit.

And, according to the study’s abstract, the payment is higher for attracting parishioners who switch from toher Methodist congregations.  That seems to be exactly the wrong incentive!

See: “Is a Higher Calling Enough? Incentive Compensation in the Church” by Jay C. Hartzell, of the University of Texas at Austin – Department of Finance, et al.

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.

via SSRN-Is a Higher Calling Enough? Incentive Compensation in the Church by Jay Hartzell, Christopher Parsons, David Yermack.

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