Pay for Performance Plan Designing a pay for performance plan for teachers is inherently challenging. The outputs for teachers are students, and their educational attainment. It is difficult to quantify educational attainment at the best of times, and because each student is different it can be difficult to specifically identify the role that an individual teacher has on aggregate student performance. The three elements of an effective pay-for-performance plan are efficiency, equity and compliance. Efficiency and equity are both challenging for teachers because of the inherent difficulty in measuring their outputs. There are no efficient and equitable measures. Standardized test scores can be efficient, but they are problematic because they do not directly measure the quality of the teaching, or the students' ability to grasp and apply concepts. Student bodies can vary significantly from school to school, so there is also no equitable way to evaluate teacher performance across an entire state. Compliance is the one piece that might be possible, because the standardized tests are mandatory, but the Georgia example shows that it is necessary to police the testing process carefully.

One of the issues I see with the Georgia pay-for-performance plan...

A better design would be more complex up front, but maintain relative simplicity after that. If teachers were broken down into buckets – by type of class, and by geographically similar areas – there would be greater equity. Geographic regions would be determined on the basis of demographic characteristics – so a poor rural area is not compared with a rich suburban one, for example. Standardized tests could improve , or be augmented with ones that have a subjective element that is graded off-site (like AP tests are), that would allow for more effective measuring of student outcomes. It's more complex, but allows for much greater accurately and equity – and after it's been set up this is only a small sacrifice in efficiency. The final component of a good pay-for-performance plan is compliance. With third party grading, there is a higher degree of compliance as well.
All told, the Georgia case seems to highlight a plan that is oriented towards utmost efficiency, but makes trade-offs in equity and compliance to make that work. By striking a better balance of all three elements of an effective pay-for-performance system, outcomes like the case would be less frequent, and teachers…