Performance Pay: Texas

Retaining Effective Teachers Policy


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

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

Analysis of Texas's policies

Texas supports performance pay. The state's Campus Incentive Plan is "designed to reward teachers who have a positive impact on improving student achievement." Teachers are eligible for an incentive payment if they "demonstrate success in improving student achievement using objective, quantifiable measures, such as local benchmarking systems, portfolio assessments, end-of-course assessments and value-added assessments." Teachers must also collaborate with other faculty in an effort to improve overall student achievement. Incentive awards may not be less than $3,000 or more than $10,000.

The state's District Awards for Teacher Excellence (DATE) grant provides awards to teachers and principals who effectively improve student achievement as determined by meaningful, objective measures; provides stipends and awards to other district employees and supports professional development and builds data capacity. Sixty percent of funds awarded to classroom teachers and principals must be based on measures of student achievement, growth and/or improvement. The remaining funds may be used for awards to other personnel, stipends for mentors or funds to support district data capacity or professional development.


Recommendations for Texas

State response to our analysis

Texas was helpful in providing NCTQ with the facts necessary for this analysis.

How we graded

Performance pay is an important recruitment and retention strategy.

Performance pay provides an opportunity to reward those teachers who consistently achieve positive results from their students. The traditional salary schedule used by districts pays all teachers with the same inputs (i.e., experience and degree status) the same amount regardless of outcomes. Not only is following a mandated schedule inconsistent with most other professions, it may also deter talented individuals from considering a teaching career, as well as high-achieving teachers from staying in the field, because it offers no opportunity for financial reward for success.

States should set guidelines for districts to ensure that plans are fair and sound.

Performance pay plans are not easy to implement well. There are numerous examples of both state and district initiatives that have been undone by poor planning and administration. The methodology that allows for the measurement of teachers' contributions to student achievement is still developing, and evaluation systems based on teacher performance are new in many states. Performance pay programs must recognize these limitations. There are also inherent issues of fairness that should be considered when different types of data must be used to assess the performance of different kinds of teachers.

States can play an important role in supporting performance pay by setting guidelines (whether for a state-level program or for districts' own initiatives) that recognize the challenges in implementing a program well. Because this is an area in which there is still much to learn about best practice, states should consider piloting local initiatives as a way to expand the use of and knowledge base around performance pay.

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: