In their quest to improve student achievement, educators and policymakers have once again seized on the idea of paying teachers based on performance. The issue has become so popular that both of the candidates in the 2008 presidential election endorsed some form of performance-based pay. And the American Recovery and Reinvestment Act of 2009 includes $200 million for the Teacher Incentive Fund, which will provide grants to states and districts to develop performance-based compensation systems for teachers and principals.

While this high-level interest is new, the idea has been on the education-policy agenda for a quarter-century, and it has been hotly controversial. Many districts have launched pay-for-performance programs that have faded away. Recent research can help school board members and policymakers avoid what didn’t work in the past and learn from promising practices being tried in several urban districts today. Here’s what we know:

• Research on pay for performance plans, while still thin, suggests that performance-based pay can have a positive impact on student achievement, although the effects are relatively modest. However, there is little evidence about what type of rewards are most effective. And there is little long-term research to show whether these types of programs attract better-qualified individuals to teaching or keep them in the profession.
• Past plans that failed did so because of poor design. Frequently-cited problems include insufficient compensation that did not provide enough incentive for teachers to change, inadequate funding for the program itself, or the process for making awards seemed arbitrary and unfair to teachers.
• A study of the widely publicized Denver Professional Compensation (ProComp) Plan, which pays teachers more if they or their students meet certain goals, showed a positive impact on student achievement. Another well-known effort, the Teacher Advancement Program (TAP), also rewards teachers with higher pay based on value-added measures. Several studies of TAP showed positive results. However, an independent study found that the gains were obtained only in elementary schools.
• A long-standing group awards program in Dallas, Tex. offers bonuses to the teachers and bonuses in schools that increase student achievement the most. One study suggests the program has positive effects on student performance, but also hints at some negative practices such as curriculum narrowing and high turnover in schools that do not win awards.

School boards should consider these things when designing a pay-for-performance plan:

• Guarantee stable and adequate funding. If teachers think funds will dry up, they have little incentive to change.
• Provide competitive compensation. Determine how large awards need to be to create a true incentive for teachers to change their practice, or to attract new teachers to a district.
• Build strong measurement systems. Value-added measures offer promise as fair ways to assess student growth, since they measure the gains students have made since the previous year rather than overall achievement. These systems should be used to monitor the plan’s effectiveness.
• Include principals, administrators, and teachers in the design process. Getting ideas and agreement from those most directly affected will smooth implementation.

Posted: July 9, 2009

©2009 Center for Public Education