By: Jessica Baker, Michael Berner, Cheryl Cresci, and Dina Vigliotta
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Merit pay and pay for performance are often used
interchangeably. They are labels applied to pay systems that
include a range of components—there is no single definition. The
pay systems usually include evaluation as one component, and,
today, there is growing pressure to include standardized test
scores as a measure of teacher performance. (NEA, 2011)
Merit pay for teachers is a system of compensation in which
teachers who are “better” at their jobs (meaning they are more
effective) are rewarded with higher compensation, although other
forms of differentiated pay often are included. There are two basic
systems: (1) those that reward teachers for what they do, and (2)
those which reward teachers for what their students do. Many
performance pay systems combine both these elements. (NEA,
2011)
http://www.weac.org/pdf/2011-12/merit.pdf
The Issue:
“Most public school teachers are paid today
under a system that is close to 90 years old and
involves allowing teachers to earn salary
increases through experience and additional
coursework. There is a ‘pay for performance’
movement that would allow teacher salaries to
be linked to how well a teacher does his/her
job--especially by how well their students do on
standardized tests and on their evaluations.” Valerie Strauss, The Washington Post
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Contractual salary schedules for teachers are a nearly universal
feature of American K–12 public school districts.
Data from national surveys show that close to 100 percent of
traditional public school teachers are employed in school districts
that make use of contractual salary schedules in pay setting
(Podgursky, 2007).
Thus, roughly 3.1 million public school teachers from
kindergarten through secondary level are paid largely on the
basis of years of experience and education level. These two
variables, researchers suggest, are “weakly correlated, at best,
with student outcomes” (Hanushek, 2003).
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The single salary schedule contrasts with pay determination
practices in the majority of white collar professions, where
performance-related pay programs are commonplace.
Most private sector employees are given two types of pay:
1. Base pay- represents a foundation or floor on pay, which is
guaranteed (or at low risk) and typically paid as a salary,
hourly, or piece rate wage.
2. Variable pay- is riskier and is associated with the bonus or
performance pay system. Variable pay is compensation that is
contingent on discretion, performance, or results that comes in
the form of an individual bonus, a group bonus, or some
combination of the two.
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Merit-based pay programs date back to Great Britain in the early
1700s!
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Similar ideas formed around the notion of performance contracting
in the late 1960s (Stucker & Hall, 1971)
• In the late 1960s, President Nixon introduced “performance
contracting,” which offered incentives to private firms to
improve student achievement. By the early 1970s, over 150
school districts contracted with companies to deliver
instruction, as the Nixon Administration initiated a vast
privatization experiment in Texas and Arkansas.
• None of these performance contracting experiments
significantly improved instruction. After charges of corruption,
teaching to the test, and a lack of results, the program was
abandoned and the single salary schedule continued to
dominate school districts throughout the U.S. (NEA, 2011)
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It was not until the release of the A Nation at Risk report in 1983 that a
significant number of public school districts in the United States
began considering merit-based pay as an alternative or supplement
to the single salary schedule.
• A Nation at Risk, a Reagan Era critique that blamed the nation’s
economic downturn on poor schooling, recommended increased
pay for teachers and pay for performance as two strategies to
improve the nation’s system of education. (NEA, 2011)
• “Professionally competitive, market-sensitive, and performance-
based” (A Nation At Risk: Recommendations, 1983). One goal of this
recommendation was to tie compensation more directly to
classroom skill.
• Merit pay has been used as an attempt to rectify the failings of the
single-salary pay schedule, including the frustration that all
teachers with the same educational level and experience are paid
equally, despite potentially unequal performance and skills.
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Today, pay for performance or merit pay is a national trend,
pushed by the federal government which, in 2008, established
funds for incentives, including the use of test scores. Cities from
Minneapolis to Denver, Toledo, Chicago, New York and San
Antonio adopted performance pay systems. By 2008, Alaska,
Arizona, Arkansas, Florida, Minnesota, North Carolina and Texas
had systems that base teacher pay in part on performance. Other
states are currently considering such legislation.
Merit-based pay rewards individual teachers, groups of teachers,
or schools on any number of factors, including student
performance, classroom observations, and teacher portfolios.
Merit-based pay is a reward system that hinges on student
outcomes attributed to a particular teacher or group of teachers
rather than on “inputs” such as skills or knowledge—a critical
distinction that is emphasized later in this review. (NEA, 2011)
Family life
Prior Teachers
Student Mobility
 Middle
school math teachers were
offered bonuses if students performed
well on state test.
• Control group comparison
 Over
the course of the three year study,
“students did not progress any faster in
classrooms where teachers were offered
bonuses.”
Source: http://www.nj.com/news/index.ssf/2010/09/merit_pay_for_teachers_who_imp.html
 Elementary
school teachers were offered
bonuses if students performed well on
state test.
• Administrators and other teachers were also
rewarded if the school improved overall.
• Control group comparison
 After
two years students achieved
“average gains of approximately seven
percentile points” and the control schools
showed a decline in scores.
Source: http://www.ascd.org/publications/educational-leadership/oct08/vol66/num02/When-Merit-Pay-Is-Worth-Pursuing.aspx
 TAP
(The System for Teacher and Student
Advancement) is a well-funded nationwide
program.
 Offers performance-pay incentives, but also
has intensive professional development, 4-6
observations a year, opportunities for career
advancement, ongoing support and mentoring
for teachers and students, and so on.
 Let’s take a look at their results….do you notice
anything interesting (math teachers)?
Source: http://www.tapsystem.org/
 It
is difficult to evaluate due to numerous
outside factors.
 Most research is based on a single test
score result.
 Cannot directly prove if student
achievement increases because of merit
pay alone.
 Difficult to compare studies due to
different populations, resources, etc.
Research shows that the
presence of a high-quality
teacher improves student
performance.
Performance pay decreases
intrinsic motivation of teachers.
 Depends
on funding source.
 Requires short and long term financial
planning.
• Costs need to be identified, projected, and a
plan for maintaining the funds needs to be laid
out.
 Lots of anticipation!
• Change in teaching force.
• Change in the number of students.
• Supplemental resources.
• Other funding sources.
 EXPENSIVE!
 Who
is receiving merit pay?
• Math/ELA v. All teachers v. All staff
 How
much does each teacher or
administrator get?
• Scale
• Percent
 How
long?
 Schools
have several different ways of
funding merit pay.
• Grants
• Private Corporations
• District (community)
• State
• Federal – Teacher Incentive Plan
 Delaware