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Financial Awards for High-Performing Schools Are Gaining Favor

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This fall, as Indiana begins to dole out $10 million in "rewards" to schools that meet certain goals for student achievement and attendance, Vincent Schrader will be watching anxiously.

Unlike many principals in the state, he is not worried about whether his school will win any money. Mr. Schrader is not a principal. He is manager of the state's Performance-Based Awards program, and his is a different sort of suspense.

"I'm really anxious to see how the schools will go about using the money," he said.

Award-winning schools will be able to use the cash for anything but athletics and teacher salaries or bonuses. "Beyond that," he noted, ''the sky's the limit."

Indiana is one of a handful of states that in the past five years have established cash-incentive programs aimed at improving school performance.

Florida, Indiana, Michigan, Pennsylvania, and South Carolina currently operate cash-incentive programs for schools or districts. Louisiana's plan is still in preparation, while a Massachusetts plan has been left unfunded since its creation two years ago.

All the programs offer additional state funds to schools or districts that show substantial improvement over previous performance. All allow the winners fairly wide latitude in deciding how to spend the money.

And, as Mr. Schrader's comments indicate, all generate a mixture of excitement and uncertainty.

The state cash-incentive programs have taken on added importance recently because they represent the most significant tests so far of an idea that is attracting increasing attention and support on the national level.

President Bush, in his package of education initiatives released last winter, gave heavy emphasis to a similar proposal, which he called the "Presidential merit schools" program. With requested funding that would eventually reach $500 million a year, the program of rewards for schools that improved student achievement, cut drug abuse, and reduced their dropout rates was the largest single element of the overall plan.

The Senate Labor and Human Resources Committee approved legislation in July based on Mr. Bush's proposal, although with reduced funding and limited to schools eligible for Chapter 1 compensatory-education aid. (See Education Week, Aug. 2, 1989.)

In addition, Albert Shanker, president of the American Federation of Teachers, called this summer for a financial-incentive program that would provide bonuses of up to $15,000 to faculty members at the 10 percent of schools that showed the greatest improvements.

Proponents of the programs say the prospect of rewards will lead to better schools. "Financial incentives can spur schools to rise to the challenge of meeting achievable standards of excellence," a statement released with Mr. Bush's proposal argued.

Even as they acknowledge the appeal of incentives, however, some who have studied the existing state programs say they have not yet been proven effective.

"We all know incentives work in our personal and business lives," observed Erling E. Boe, a professor of education at the University of Pennsylvania. "And we feel that they should work in education as well. But there's no evidence that they do work--or that they don't, for that matter."

South Carolina's Example

According to Mr. Boe, South Carolina's "School Incentive Reward Program" is "generally regarded as the leading example of merit-school programs." Established in 1984, the program awarded a total of $3.9 million to more than 250 schools last year.

All schools in the state are part of the program. To qualify for funds, a school must show improvement in one of three areas: student achievement, student attendance, or teacher attendance.

Depending upon how many of these target areas show gains, schools can receive grants of up to about $30 per pupil. The money cannot be given to teachers as bonuses, said Michael Turner, director of the state office of accreditation and assessment.

For the purposes of the program, all schools in the state are placed into one of five groups. Schools compete for awards within these groups, which are based on factors, such as each district's financial strength, that influence student achievement.

Within each group, the 25 percent of schools showing the most improvement receive award money. In this way, a school need not show substantial improvement each year, only relative improvement compared with the other schools in its group, Mr. Turner noted.

"We didn't want to penalize schools that make a lot of improvement" by making it more difficult for them to win the next year, he said.

"The program has been extremely well-received," Mr. Turner said. "It's perceived as an equitable program."

Florida Bonuses

Florida's five-year-old "District Quality Instruction Incentives Program" is voluntary; each year, about 30 of the state's 67 districts elect to participate. "And it's basically the same 30 or so districts," noted Janice Smith-Dann, a program administrator.

Each participating district submits a "plan for improvement," approved by the school board and the local teachers' union, to the state education department.

The plans vary widely. Some districts ask schools to meet achievement criteria on only a few tests, Ms. Smith-Dann explained, while others "may have an extensive list of 25 goals and ask schools to meet five of them."

By state law, however, all plans must include improvement on a verbal-skills test and a quantitative-skills test, and in one of four areas such as parental participation or physical fitness.

A school that meets its district's expectations is designated a "meritorious" school.

The state parcels out the awards based on the number of such schools in each district. The district, in turn, gives the money to those schools. The current budget for the program is $10 million.

Schools can spend their money on "direct instructional improvement,'' such as equipment and training, or for teacher bonuses. "Most of the districts put 100 percent of their money toward bonuses," Ms. Smith-Dann said.

Broad Support

Officials in states with incentive programs report that opposition to the idea has been scarce.

"I don't think there's anybody who objects to the concept of incentives," says Edward Roeber, supervisor of the Michigan Education Assessment Program.

Michigan's program, based on improvement on a statewide achievement test, will disburse $5 million beginning this fall.

Most of the programs involve several groups in the process of seeking and using the rewards. In Pennsylvania, where a $5-million program is in its second year, teachers and administrators in each school decide how to spend the money. Often parents and students have input too, according to Daniel Wofford, a special assistant to Gov. Robert P. Casey.

Like South Carolina, Pennsylvania prohibits using the money for teacher bonuses. Last February, 202 of the state's 3,260 schools received awards ranging from $1,700 to $107,000. They won the awards for improving students' reading and mathematics scores, reducing their dropout rate, or increasing the number taking college-preparatory courses.

State officials said they were uncertain how many schools would win money this year.

"The way it's working, it's great," says George Badner, a spokesman for the Pennsylvania State Education Association.

The p.s.e.a. objected to some parts of the program at first--particularly to the way the state publicized test results, Mr. Badner said. But by the time it went into effect, he said, "I don't think it had any opposition at all."

In Florida, the a.f.t. affiliate endorses the program. "The merit-school program in Florida was one that we supported early on," recalled Pat Tornillo, president of Florida Education Association/United.

But John Ryor, executive director of the Florida Teaching Profession, an affiliate of the National Education Association, noted that the program is not cost-effective for some districts.

The program has been "useful in those schools where it has been employed," he said, while adding that certain districts have elected not to participate because "it's an economic issue."

"There was never a great deal of money involved in the program to begin with," he said. As a result, many districts have simply decided to devote time and personnel to other areas.

As might be expected, principals of schools that have won money are enthusiastic. Charles Stoudenmire, for example, is principal of the Knightsville Elementary School in Summerville, S.C., which has earned more than $75,000 over the last three years.

"That's good money, anywhere you put it," Mr. Stoudenmire said. "We've placed computers in every classroom."

Evaluations Lacking

Still, hard data to show that the merit-schools concept achieves the desired results are limited.

"I don't think there's any conclusive evidence as to how well it works," said Ramsey Selden, director of the education-assessment center at the Council of Chief State School Officers.

State administrators admit as much. "We've not had a thorough evaluation," Ms. Smith-Dann of Florida conceded.

The number of Florida schools designated "meritorious" increased steadily over three years, from 313 in 1985-86 to 510 in 1987-88.

Officials cautioned, however, that the growth was not a reliable indicator of the program's effectiveness.

"It just means that bigger districts are participating in the program," said Jeanine Blomberg, program director for financial management.

Ms. Smith-Dann said the state will soon award a contract for a comprehensive study.

In South Carolina, a state survey showed local officials and teachers approve of the program. But, Mr. Turner noted, it "would be difficult to separate out effects" for a more detailed study.

The state does, however, collect data on the percentage of award recipients who are repeat winners. In 1987-88, for example, 258 schools won money. Of those, 48 were winners for the second time; 33 were three-time winners; and 21 had won each year since the program's inception.

Some state education officials described the merit programs as being part of broader school-reform efforts. "Our program really reflects a lot of the principles the '86 Carnegie report [on the teaching profession] laid out" said Mr. Wofford of Pennsylvania. "Holding schools accountable and giving more decisionmaking power to teachers" are two goals of the program, he argued.

Mr. Boe maintained, however, that many of the programs actually shift power to state legislatures. Lawmakers "feel they can gain some influence over schools by creating various rewards for performance," he said.

Merit-school programs deserve further study, Mr. Boe added. "They appear to make sense, but we just don't know."

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