Education Chief Says Market-Based Policies are Ineffective

The head of Australia’s leading education research body, the Australian Council for Educational Research (ACER), has questioned the effectiveness of teacher and school incentives as a school improvement strategy. ACER Chief Executive Geoff Masters said that there is little evidence that performance pay for teachers, financial incentives for schools, encouraging competition between schools and sanctions on schools that fail to improve are effective in delivering better student outcomes.

Writing in the journal Teacher, Masters said that the idea that financial incentives, sanctions and competition between schools could be used to improve school outcomes has had far-reaching influence on education policy in many countries in the last 15 years or more.

Examples of such initiatives include the No Child Left Behind legislation in the United States, which required schools to demonstrate that they were making adequate yearly progress and provided escalating negative consequences for schools that were unable to do this; the creation and publication of league tables of ‘value-added’ measures of school performance in England; proposals to introduce financial rewards for school improvement and performance pay tied to improved test results in Australia; and the encouragement of competition between schools under New Zealand’s Tomorrow’s Schools program.

However, Masters said, there are good reasons to question the effectiveness of these measures.

First, the countries that have been pursuing this strategy tend to be the countries that have experienced the greatest declines in student performance over the past decade. Australia, New Zealand, UK, USA, and Sweden have all seen their school results decline despite the introduction of market-based policies. Masters wrote:

Although it’s not possible to attribute these declines to any specific education policy, it’s also hard to conclude that incentive schemes and new school accountability arrangements in these countries have had a positive impact on student performance.

Second, there is little compelling research evidence to support these policies. For example, research published by the US National Research Council and RAND Education shows that incentives for schools and teachers to improve student performance did not lead to increases in student achievement.

Masters also noted that as well as being of questionable effectiveness, incentive schemes often result in unintended and undesirable behaviours on the part of teachers and schools, ranging from the narrowing of the school curriculum, to withholding less able students from testing, to providing inappropriate assistance to students during tests.

Third, although incentives are popular in the world of business, there is growing evidence that financial rewards are not particularly effective there either and they are often counter-productive.

Masters concluded:

Whether in the form of pay-for-results, sanctions for not improving, or the threat of losing students to competitors, there is little evidence that current improvement incentives are delivering better student outcomes. To borrow a term from Michael Fullan, incentives appear to be among the many ‘wrong drivers’ of school improvement.

It is a conclusion that should be acknowledged and taken on board by the Federal and state/territory governments that have blindly put their faith in financial incentives and more competition to improve student outcomes. These policies have failed to improve student results but have generated greater inequity between rich and poor and greater social segregation between schools.

Trevor Cobbold

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