Teacher Performance Pay: A Review

Teacher Performance Pay: A Review - "The purpose of this paper is to examine the economic case for performance related pay in K–12 education system. While we focus on teachers, by far the largest group of employed professionals in K–12 public education, most of the arguments generalize to school administrators as well. Our review begins with a brief history of U.S. teacher compensation policy and then moves to general descriptions of six large-scale performance-related pay programs currently in operation or about to be launched in U.S. schools.

"We then review theoretical arguments involving performance-related pay policy, paying particular attention to issues such as performance monitoring, team production, the multitasking problem, and input-based versus output-based pay systems. We then review several strands of empirical research that have relevance for this debate, including teacher effect studies, direct evaluations of individual and group performance pay schemes, and studies of incentive pay in private schools and charter schools. While the direct evaluation literature is slender, it does provide some important results for policy.

"We conclude that while the empirical literature is not sufficiently robust to prescribe how systems should be designed—for example, optimal size of bonuses, mix of individual versus group incentives—it does make a persuasive case for further experiments by districts and states, combined with rigorous, independent evaluations."

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