Pay for performance is becoming commonplace in the business world. Pay raises and bonuses are often based on how well one performs on the job or on achieving specific results. However, this is not the case in education. Pay levels are typically based on years of experience and levels of education rather than on teacher effectiveness. As concerns about the quality of the nation's educational systems frequently appear in the news, one of the solutions suggested has been a pay for performance system for teachers. Interestingly, these programs are often met with resistance from teachers and teachers' unions. This paper will examine the effectiveness of such programs and the disadvantages for employers and employees. Pay for performance programs are designed to compensate teachers based on how well their students perform or on observed behaviors in the classrooms (Chait & Miller, 2009). One of the keys to the success of these programs is tailoring the compensation program to the needs of the local school organization. According to Chait & Miller, some programs add performance incentive bonuses to a standard salary structure, while others replace a seniority-based pay schedule with a pay for performance schedule. Additionally, performance incentives may be based on individual, collective, or a combination of individual and collective performance.

Chait & Miller (2009) assert that while teachers often claim in surveys that working conditions are more important than pay, when actually offered the choice, teachers chose an increase in pay. In a survey cited by Chait & Miller, 82.7% of teachers surveyed in...

Chait & Miller also report that the fact that most traditional education systems reward advanced degrees provides proof of the incentivizing effects of pay. According to Chait & Miller, 47.1% of teachers have advanced degrees. In another study cited by Chait & Miller:
80% favored incentives for " teachers who work in tough neighborhoods with low-performing schools"

58% supported incentives for "teachers who consistently receive outstanding evaluations by their principals"

53% favored incentives for "teachers who specialize in hard-to-fill subjects such as science or mathematics"

42% favored "teachers whose students routinely score higher than similar students on standardized tests."

While the climate may be conducive to teacher pay for performance programs, the question then becomes whether or not such programs are effective. According to Chait & Miller (2009), the aim of such programs should be in improving student achievement, teacher skills, or teacher retention.

While there seems to be promise regarding the effectiveness of pay for performance programs, these types of programs are not without their disadvantages for teachers and administrators. For example, in order for merit pay to improve the quality of teaching, either poor teachers must leave the profession and be replaced by…