Teacher merit pay
The evaluation may be based either on measurable factors like changes in student test scores, supervisory judgment or a combination of factors, some measurable and some subjective. A merit pay increase may take the form either of a one-time performance bonus, a salary increase or advancement on the district salary schedule.
Merit pay, while standard practice in the private sector, is not common in public education. This is partly attributable to teacher union opposition and partly due to the difficulty of determining an appropriate basis for evaluating teacher performance. Student test scores are the most commonly suggested measure of teacher performance.
Merit pay was first implemented in the United States in 1908 in Newton, Massachusetts, but it failed to achieve national popularity at the time. In the 1960s, President Richard Nixon introduced "performance contracting" which was a system of incentives for private firms to improve student achievement. By 1978, a national survey of school districts larger than 300 students found that only four percent of districts based teacher pay on student performance. A number of districts continued to experiment with pay for performance programs, including a nationally recognized plan in Fairfax, Virginia that was implemented in 1986, but the plan was abandoned by the school district in 1992.
The trend grew in national popularity in the 2000s with federal support and established funds creating incentives for compensation systems that include the use of test scores. Chicago, Denver, New York, Minneapolis, San Antonio and Toledo all adopted pay for performance systems. By 2008, eight states used systems that based teacher pay in part on performance, however, not all schools in these states participated in merit pay plans. In 2006, Florida enacted a law requiring 60 percent of teacher bonuses to be based on student test scores.
In 2012, U.S. Secretary of Education Arne Duncan stated merit pay for teachers was the U.S. Department of Education's highest priority. The $4.3 billion Race to the Top fund encouraged states to implement performance pay systems among other changes.
Despite support and incentive from the federal government, merit pay adoption is still not widely implemented at the school district level. The National Center on Performance Incentives found in a 2011 report that only about 3.5 percent of school districts reported adopting merit pay plans. A report by Stuart Buck and Jay P. Greene stated, "most were so weak that they represented no meaningful change from traditional compensation systems." Buck and Greene's report also detailed union efforts to block teacher merit pay implementation in Philadelphia, Cincinnati, Alabama and Arkansas. Unions have also had success in blocking merit pay implementation in states like Florida, Iowa and Texas that have made laws supporting the practice. In Iowa, only three of 360 districts applied for the Career Ladder and Pay-for-Performance grant program. Texas also struggled with implementation of their District Awards for Teacher Excellence program after only 20 percent of districts opted into the program in 2009-2010.
Types of plans
Some merit pay plans are designed to reward outstanding work by individual teachers. Others are based on the assumption that student progress depends on the cooperative work of a teaching team and therefore lead to bonuses or pay increases to the entire staff of a particular school, sometimes including non-professional staff.
Merit pay should not be confused with pay for achieving certain credentials, whether advanced degrees or certifications based on peer evaluations of portfolios. Nor should it be confused with skill-based pay, which involves higher salaries for teachers with scarce qualifications (e.g., ability to teach honors calculus) or "hardship pay" for accepting certain difficult assignments (e.g., teaching in low-income areas).
Tying teacher bonuses to student performance, evaluations or other metrics have been a common method of implementing teacher merit pay plans. Texas implemented a teacher bonus plan tied to student achievement known as the District Awards for Teacher Excellence, which received $392 million in funding from the 2010-2011 state budget and paid 180,000 educators bonuses over the period of implementation. Initially praised as a model plan by Texas Governor Rick Perry, the plan's funding was cut to $24 million and paid only 18,000 bonuses based on performance during the 2012-2013 budget year. At the height of participation in this plan about 295 districts participated in the program.
New Jersey implemented the state's first merit pay plan for teachers in Newark Public Schools. The plan offered teachers bonuses up to $12,500 awarded in three stages. $5,000 could be earned for being rated highly effective, another $5,000 could be earned for working at a poor performing school and $2,500 could be earned for teaching hard-to-staff subjects. Seventeen teachers of the 3,200 teachers in the district earned the top bonus level of $12,500.
The Teacher Advancement Program is a system of merit-based pay created by the Milken Family Foundation in 1999. In 2006, the plan was expanded with a $600 million federal grant program called the Teacher Incentive Fund and later expanded again in 2009 under the American Recovery and Reinvestment Act.
The goals of the Teacher Incentive Fund are:
- Improving student achievement by increasing teacher and principal effectiveness
- Reforming teacher and principal compensation systems so that teachers and principals are rewarded for increases in student achievement
- Increasing the number of effective teachers educating poor, minority and disadvantaged students in hard-to-staff subjects
- Creating sustainable performance-based compensation systems
Claims and criticism
Proponents of merit pay claim that it results in better education outcomes for students. They also argue that districts with merit-based pay can improve teacher retention rates and attract talented teachers to low-performing schools.
Critics of merit pay argue that there is research demonstrating that merit-based pay alone does not increase student achievement, and they claim negative effects of merit-based pay. Some claim merit pay increases competition among teachers and lowers teacher morale. Others claim that merit pay can create incentives for collusion and cheating among teachers.
A 2010 survey conducted by the Harvard’s Program on Education Policy and Governance (PEPG) and Education Next found that nationally 15 percent of those surveyed completely favored and 34 percent somewhat favored tying teacher pay to their students scores on state tests. For the teachers that were surveyed those numbers were lower with only three percent of teachers responding they completely favored the practice and 21 percent somewhat favoring the practice.
- American Labor Studies Center, Glossary of Negotiation Terms
- Teacher Incentive Fund
- Race to the Top Fund
- NOLA.com, "Teachers to begin receiving merit pay based on 2013-14 evaluation scores," October 3, 2013
- Forbes, "Merit Pay For Teachers Is Only Fair," November 26, 2013
- Wisconsin Education Association Council, "The history of merit pay," accessed February 20, 2014
- The Economist, "Into the hornets' nest," May 10, 2007
- Wisconsin Education Association Council, "Pay for performance today," accessed February 20, 2014
- Slate, "The Bonus Lottery," September 4, 2008
- National Education Association, "Pay Based on Test Scores?," accessed February 20, 2014
- U.S. Department of Education, "Race to the Top Fund," accessed February 20, 2014
- Education Next.org, "In the United States, Merit Pay Plans for Teachers are Few and Far Between," February 24, 2011
- Education Next.org, "Blocked, Diluted, and Co-opted," accessed March 18, 2014
- The Economist, "Bonus time," November 22, 2012
- Dallas News, "Texas merit pay plan for teachers quietly disappears," October 13, 2013
- The Wall Street Journal, "Newark's Merit-Pay Plan Begins," August 29, 2013
- U.S. Department of Education, "Teacher Incentive Fund," accessed February 20, 2014
- Heartland Institute, "Merit Pay for Teachers Improves Student Achievement in Arkansas," accessed February 20, 2014
- American Educational Research Journal, "Teacher Turnover and Teacher Shortages: An Organizational Analysis," accessed February 20, 2014
- Slate, "What Happens When Great Teachers Get $20,000 to Work in Low-Income Schools?," accessed February 20, 2014
- Vanderbilt University, "Teacher performance pay alone does not raise student test scores," September 21, 2010
- University of Missouri, "The Pros and Cons of Performance Based Compensation," accessed February 20, 2014
- St. John Fisher College, "Merit and Performance-Based Pay," accessed February 20, 2014
- Education Next, "Education Next – PEPG Survey – 2010," accessed March 18, 2014