Is there a place for performance-based teacher compensation in our public school system?

On the basic question posed in this debate—is there a place for performance-based teacher compensation in our public school system?—there seems to be some agreement.  My opponents from the Economic Policy Institute and Columbia University acknowledge that there is a place for performance pay in public education. 

What that place is, though, remains unclear.  They certainly don’t think that merit pay systems should be based on a system of standardized testing, arguing that to do so would be “wrong-headed” and “technically infeasible.”

Messrs Roy, Mishel, and Corcoran arrive at this conclusion by discussing a range of theoretical obstacles to creating successful performance-pay programs.  But they ignore or dismiss the emerging academic research and practical evidence suggesting that merit pay programs can positively benefit students—improving students’ academic achievement on standardized tests.

Perhaps this shouldn’t be a surprise.  The authors imply that they don’t view improving students test scores as a clear success, writing that we need to have an “honest conversation” about how and when we determine a merit pay program to be a success.

Let’s have that conversation.  In my view, setting academic standards and measuring whether children can attain a basic level of knowledge through testing is a reasonable way to measure success and progress.  Tests can help determine whether a student is mastering key skills and inform parents of their progress.  Standardized testing shouldn’t be the only way that we judge our schools’ effectiveness.  But it is an important tool for measuring whether children are learning and whether teachers are effective. 

As I argued below, policymakers can implement performance-based pay systems in various ways.  These include creating positive incentives for teachers to improve students’ academic achievement on both individual and school-wide outcome measures, such as tests and graduation rates.  It also includes other reform strategies like empowering school principals with more control over school budgets and resource allocation—including the power to provide bonuses to effective teachers. 

Given the serious challenges that we face in American education, education reformers should experiment with promising policy strategies like performance pay to improve learning opportunities for children.  Fortunately, we’re already seeing this happening.  A growing number of states and school districts are implementing merit pay programs with increasing bipartisan support. 

Researchers and policymakers should study these programs and determine what strategies are most effective.  Programs that succeed should become models and be replicated broadly across the country.

A Broad Approach to Performance-Based Pay in Education

I am glad to see that there is some agreement that “performance-based pay will and should play a more prominent role in our public schools.”  But it is unclear what form of merit pay Messrs Roy, Mishel, and Corcorn might support.  It is clear that they oppose any system of merit pay that incorporates standardized test scores.

On this point, I think the authors are mistaken.  Standardized tests are an important tool for assessing whether a student is learning.  If the goal is to improve student learning by some measurable standard, tests will be a critical component of a merit pay system.   And as I wrote in my original post, there is encouraging evidence that a performance-pay system based on students test scores can have a positive effect. 

But it is important for us to consider other promising strategies for implementing performance pay.  The authors are right to point out that basing merit pay on individual students’ standardized testing won’t work for all subjects or all teachers under current testing systems.  Here are three additional performance-based pay approaches that policymakers should consider. 

First, policymakers should provide incentives for teachers that succeed in accomplishing specific objectives.   One promising strategy is to provide bonuses to teachers who succeed in helping students to pass Advanced Placement exams.  A program to do this in Florida has led to dramatic increases in minority students passing AP exams.  A similar pilot project in Dallas has also succeeded in increasing AP passing rates.

Second, policymakers should provide school-wide bonuses to high performing schools to encourage improvement throughout the school.  States can encourage progress by providing financial awards to schools that make progress on certain outcome measures (like graduation rates and standardized tests).  Under such a reward system, the school community as a whole benefits from improved academic achievement.  Teachers could be given a say in how the bonus is distributed. 

Third, school leaders and principals should be given more authority, including the power to provide bonuses to the most effective teachers.  Ultimately, a principal will be in the best position to determine which teachers are most effective.  Reforms that give principals the power to determine how teachers are compensated should be welcomed as a promising strategy to move toward merit pay (without a sole focus on standardized test scores). 

The bottom line is that we need to move away from the uniform approach to teacher pay that prevails in American education.  These performance-based pay strategies—including the use of standardized tests—offer a promising alternative. 

Opening Argument