Performance Pay: Kentucky

Retaining Effective Teachers Policy


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

Meets goal in part
Suggested Citation:
National Council on Teacher Quality. (2011). Performance Pay: Kentucky results. State Teacher Policy Database. [Data set].
Retrieved from:

Analysis of Kentucky's policies

Kentucky supports a performance pay initiative. Teachers may earn additional compensation based on individual performance and skills, additional coursework, completion of a professional development program, school-based performance and/or multiple measures of student performance that may include portfolios of schoolwork. The state does not address the amount of award for effective performance. 


Recommendations for Kentucky

Ensure performance pay is connected to student achievement.
Although Kentucky is commended for recognizing performance pay, it should guarantee a connection to student achievement and prevent local districts from basing financial incentives solely on elements not indicative of performance in the classroom.

State response to our analysis

Kentucky recognized the factual accuracy of this analysis.

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: