Education and pay for performance

Pay for Performance Systems

How could an organization measure the effectiveness of their pay-for-performance plans?

In principle, organizations could measure the effectiveness of their pay-for-performance plans by establishing objective criteria for defining "effectiveness" and then measuring those criteria before and after implementation of the plan and comparing those results (Kline & Sulsky, 2009). For example, in a general business organization, the criteria used to evaluate the effectiveness of performance plans might be individual and team productivity, quality of production, error rates, and both supervisor evaluations and self-reports of employee satisfaction (Kline & Sulsky, 2009).

Likewise, employee turnover and retention rates before and after plan implementation could also prove useful. In addition to some of those same criteria, within an educational vocational environment, some of the education-specific criteria that could be considered might include student performance (both in course grades and also on standardized tests) and anonymous student teacher evaluations. Some of the advantages of using pay-for-performance plan in a general vocational setting include increased employee motivation, increased productivity and output, and improved work quality, in addition to better employee perceptions, attitudes, and satisfaction (Li & Yuan, 2012; Yang & Kassekert, 2011).

2. From an employee's perspective, what are the disadvantages of using a pay-for-performance plan?

However, from the employee's perspective, some of the potential disadvantages of using a pay-for-performance plan might be the generation of a more competitive environment among coworkers and increased emphasis on objective measures of performance and productivity instead of other important elements of their value to the organization that are not within the criteria used by the organization to determine performance-based pay changes (Kline & Sulsky, 2009; Weldon, 2011). That could be particularly detrimental in industries or vocational settings (precisely like education) where employees are supposed to be more intrinsically motivated than extrinsically motivated (Soo Oh & Lewis, 2009). Other disadvantages to pay-for-performance in education are that it creates a natural disincentive to take on challenges; it could introduce a "business" environment to a field in which many employees expressly chose to avoid that; and they might not even agree on what criteria are appropriate to measure teacher performance in the first place (Weldon, 2011).

3. From an employer's perspective, what are the disadvantages of using a pay-for-performance plan?