This paper examines pay-for-performance compensation programs for teachers, contrasting them with the traditional seniority- and degree-based pay structures common in education. Drawing on research from the Center for American Progress, the Wisconsin Center for Education Research, and other sources, the paper explores teacher attitudes toward incentive pay, the design options available to school districts, and the intended goals of such programs. It also analyzes key disadvantages, including the difficulty of measuring teacher effectiveness, the risk of driving effective teachers away from high-need schools, and the limitations of standardized test-based outcome measures. The paper concludes with recommendations for thoughtful, locally tailored program design.
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 examines 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 classroom (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 and 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 performance, collective performance, or a combination of both.
Chait and 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 and Miller, 82.7 percent of teachers surveyed in Washington State would prefer a $5,000 increase in pay to having fewer students in class; 88.01 percent preferred the pay increase to having a shared instructional aide; and 69.35 percent preferred the pay increase to an additional three and a half hours of preparation time.
Chait and Miller also report that the fact that most traditional education systems reward advanced degrees provides evidence of the incentivizing effects of pay. According to Chait and Miller, 47.1 percent of teachers hold advanced degrees. In another study cited by Chait and Miller, teacher support for various incentive types broke down as follows:
"Goals and promise of performance-based programs"
"Challenges in measuring performance and unintended consequences"
Pay-for-performance programs have shown promise in improving student achievement, teacher skills, and teacher retention. In implementing one of these programs, policy makers should consider teacher input in order to gain buy-in. Additionally, they should weigh the advantages and disadvantages of each type of incentive program in order to design the most effective approach for the local district.
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