Ask Dr. Salary: Teacher Incentive Pay and Merit Pay

Teacher merit pay and accountability has never gotten high grades from teachers in the past, especially with teachers' unions, but a new teacher incentive pay and merit pay is catching on in Minnesota classrooms, reports the New York Times. In a surprising display of cooperation, the teacher's union is working with Republican governor Tim Pawlenty to compensate teachers partly on their performance in the classroom.

The plan for teacher incentive pay and merit pay involves teachers working with mentors to improve their teaching abilities and also receiving bonuses when their students improve. Minnesota's $86 million teacher "professionalization and merit pay initiative" includes dozens of Minnesota school districts. Recently, teachers voted to bring this teacher incentive pay and merit pay to Minneapolis. Will other states jump on this public school merit and performance pay bandwagon?

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Public School Merit Pay Versus Tenure

According to Professor Allan Odden (University of Wisconsin), who studies teacher compensation, there are many similar nationwide teacher-pay experiments going on. These public school merit and performance pay programs often involve bonuses or raises for improving student achievement. Most often they are tried out in lower income schools or on teachers who are teaching subjects that no one else wants to teach.

Not everyone is excited. Some compensation and rewards for merit pay plans still hit a wall of opposition from teachers and unions. A teacher incentive pay and merit pay proposal created by the New York City public schools stalled. In Houston, a teacher incentive pay and merit pay plan stirred up a firestorm when the Houston Chronicle listed the teachers’ bonuses on its Web site so that everyone knew who got bonuses and who didn't. Ouch!

Merit Pay Pros and Cons

In Florida, lawmakers rushed to approve a merit pay plan before Gov. Jeb Bush left office in January, but most teachers rejected it in the spring because it limited bonuses to the top 25 percent of teachers - identified primarily by students’ test scores. In 2007, new Florida Gov. Charlie Crist and lawmakers traded in that plan for one that allows teams of teachers - not just individuals - to receive bonuses.

Merit pay - compensating teachers for classroom performance instead of years on the job - is not a new idea. This idea was proposed during the Reagan years by school administrators and policy makers as a way to improve schools, recruit good teachers, and kick bad ones out. However, teachers saw incentive pay and merit pay as a gimmick for administrators to reward cronies and eventually bring down wages for most teachers, thus it was opposed by powerful teacher unions.

Advantages of Performance Pay or Merit Pay

However, this time around, some teacher's unions are supporting the merit pay programs because student achievement is only one of many factors by which teachers are judged. Also, the merit pay is often a bonus, an addition to teacher's salaries, not a replacement (like the 1980's model). So how much do they receive? Teacher incentive pay and merit pay ranges from a few hundred dollars to $10,000 or more in some school districts.

I remain skeptical about how well merit pay can work for teachers. The problem is measuring success: students in a class do well on a standardized test. Does that mean the students are well educated, or were just taught to the test? Was it because of the teacher, or the demographics of the students' parents?

Even in the private sector, e.g., at a large software company that will remain unnamed, most knowledge worker jobs have productivity that is hard to measure. Merit pay often ends up feeling like either cronyism (money to the manager's favorite), or based on arbitrary metrics that are only loosely related to a job well done.

However, rewarding the teachers for their own improved knowledge, a component of the Minnesota plan, may be a better basis for merit pay. To adequately teach a subject, you must first understand it well. This is a pretty low bar for merit pay, but, particularly for more troubled schools, it is a place to start.

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Cheers,

Dr. Al Lee