There are persistent calls for the introduction of performance pay in Australia as a way to improve student achievement. Several performance pay programs have been trialled in the United States in recent years. They offer little evidence that performance pay will increase student results.
Teacher performance pay programs, sometimes called merit pay, link teacher salaries to classroom performance. It is being implemented in an increasing number of school districts in the United States. The federal Teacher Incentive Fund (TIF) introduced by President Bush provides funding to school districts to help them implement merit pay systems. It has been dramatically expanded under the Obama administration, with funding increasing from $97 million in 2008-09 to $487.3 million in 2009-2010.
Most teacher pay systems use salary schedules that pay teachers based on the degree that they hold and their years of service. Critics of this approach say that there is little or no direct correlation between either teachers’ years of experience or their holding an advanced degree and a student’s achievement level. They argue that teachers should be paid, at least in part, according to the results they produce in their classroom.
The main teacher performance pay programs implemented in recent years in the US were in Iowa and Texas and in the Chicago and Denver school districts. Each of these programs has been evaluated recently to determine their impact on student achievement.
The Iowa performance pay scheme was trialled in three school districts beginning in 2007-08. An evaluation report on the scheme was published in March 2010. It used multiple regression techniques to identify differences in standardized test scores in mathematics, reading, and science between students from schools in pilot programs and students in matched comparison schools. The results were mixed.
The evaluation found that in one of the districts performance pay increased student achievement in reading and science, but had no effect in mathematics. However, in the second district, student achievement in reading and mathematics in the pilot schools was lower than students in the comparison schools. In the third district, mathematics, reading, and science scores for students attending schools with performance pay were not statistically different from those students attending comparison schools.
The Texas program was trialled in 99 high poverty high achieving school districts from 2005-06 to 2007-08. An evaluation report carried out by the National Centre on Performance Incentives at Vanderbilt University was published in August 2009 . It found that the program showed some positive results in teacher retention but there was no evidence that the program generated gains in student achievement.
The Chicago trial program was funded through a combination of private funds and federal funding from the TIF program. It was adopted in ten schools in the Chicago school district in 2007-08 and was to be expanded to an additional ten schools each year. A study of the impact of the program in its first two years was published in May 2010 by Mathematica Policy Research. It found no evidence that the program raised student test scores. It also found that the scheme did not improve teacher retention.
The Denver Professional Compensation System for Teachers is perhaps the most prominent compensation reform effort yet in the US. It was implemented in 2005-06. Under the scheme
teachers can receive bonuses by obtaining advanced degrees and certifications, completing specialized professional development, demonstrating proficient practice through a newly-designed professional evaluation system, working in a high-needs school, meeting classroom learning objectives and exceeding student achievement expectations.
An evaluation of the scheme was conducted by a team from the Education Faculty of the University of Colorado in 2008. It found no evidence that teachers in the program had improved student achievement more than teachers who did not participate.
Thus, the evidence so far is that teacher performance pay has little effect on student achievement or teacher retention in schools.
The US Education Commission of the States has published a new policy brief on teacher performance pay schemes