Performance Pay

Retaining Effective Teachers Policy

Performance Pay

The state should support performance pay but in a manner that recognizes its appropriate uses and limitations.

Best practices

An increasing number of states are supporting performance pay initiatives. Florida and Indiana are particularly noteworthy for their efforts to build performance into the salary schedule.  Rather than award bonuses, teachers' salaries will be based in part on their performance in the classroom. 

Suggested Citation:
National Council on Teacher Quality. (2011). Performance Pay national results. State Teacher Policy Database. [Data set].
Retrieved from: https://www.nctq.org/yearbook/national/Performance-Pay-9
Best practice 2

States

Meets goal 14

States

Nearly meets goal 1

State

Meets goal in part 6

States

Meets a small part of goal 1

State

Does not meet goal 27

States

Research rationale

Research on merit pay in 28 industrialized countries from Harvard's Program on Education Policy and Governance found that students in countries with merit pay policies in place were performing at a level approximately one year's worth of schooling higher on international math and science tests than students in countries without such policies (2011). 

Erik Hanushek found that a teacher one standard deviation above the mean effectiveness annually generates $400,000 in student future earnings for a class size of 20. See Hanushek, Erik A. "The Economic Value of Higher Teacher Quality," National Bureau of Economic Research, Working Paper 16606 (December 2010).

In addition, numerous conference papers published by the National Center on Performance Incentives reinforce the need to recognize the limitations and appropriate uses of performance pay. See: http://www.performanceincentives.org/.

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