TQB: Teacher Quality Bulletin

Performance pay programs that pay off

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Performance pay for teachers has long been touted as a promising way to improve the teacher labor market, but it has its fair share of detractors. Proponents assert that it will make it easier to recruit and retain effective teachers, while critics assert that such schemes pit teachers against one another and are too hard to implement fairly.

new meta-analysis from Lam Pham (Vanderbilt University), Tuan Nguyen (Kansas State University), and Matthew Springer (University of North Carolina at Chapel Hill) examines over 40 studies and finds a positive and significant relationship of performance pay on student learning outcomes.

Why then has performance pay gotten such bad press over the years? One 2016 study made national headlines when they found that a poorly implemented performance pay program was a dud. So how can we implement these programs effectively? It may boil down to narrowing definitions of what constitutes a successful performance pay experiment.

The meta-analysis turns up these common ingredients:

  • Professional development boosts positive results. The integration of professional development into the performance pay program produced one of the largest effects overall.

  • Individualized incentives are more effective than group incentives. When compared to group incentive programs, whose effect sizes were insignificant, incentives that rewarded individual performance came out on top.

  • Multiple measures increase gains. Performance pay programs that integrate multiple measures of teacher effectiveness, such as combining student achievement scores with classroom observations, were associated with greater gains in student test scores than the overall effect of merit programs.

  • Larger incentives work better than small ones. When compared with studies that provided an incentive smaller than the median, those with larger incentives had better outcomes for students.