Federal Report Roundup

Report Highlights Risks of Teacher Merit Pay

By Debra Viadero — May 18, 2009 1 min read

Teacher merit-pay plans may be growing in popularity with politicians, but a new report finds that such programs are less widespread in the private sector than might be expected—and that when they are used, it is often with unintended negative consequences.

In his proposed 2010 federal budget, President Barack Obama is seeking $517 million to seed teacher merit-pay programs, which tie teachers’ pay to their students’ standardized test scores, as a way to improve schooling.

Against a backdrop of such proposals, the report, released last week by the Washington-based Economic Policy Institute, estimates that one in seven private-sector employees is covered by a bonus or merit-pay plan, which are most prevalent in the finance, real estate, and insurance fields.

Performance-pay plans may seem popular in the private sector, the report says, due to recent growth in the use of employee bonuses. But many such payments are not tied to individual worker productivity, it says. Workers might receive the awards, for example, if their company has a profitable year, and some employers give them in lieu of health benefits.

Whether tied to productivity or not, the study also finds, performance rewards account for just a small fraction of total compensation.

Part of the problem with performance-pay plans in both the public and private sectors, writes the EPI’s Richard Rothstein, one of the authors, is that they base their judgments on narrow statistical indicators. That approach can result in unintended consequences as workers game the system or because of perverse incentives in the plans themselves, he said. He offers this example: When the former Soviet Union set shoe-production quotas, factories responded by producing larger numbers of smaller shoes. The smaller shoes were useless to consumers, though.

Related Tags:

A version of this article appeared in the May 20, 2009 edition of Education Week

Events

Student Well-Being Webinar Boosting Teacher and Student Motivation During the Pandemic: What It Takes
Join Alyson Klein and her expert guests for practical tips and discussion on how to keep students and teachers motivated as the pandemic drags on.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
A Holistic Approach to Social-Emotional Learning
Register to learn about the components and benefits of holistically implemented SEL.
Content provided by Committee for Children
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
How Principals Can Support Student Well-Being During COVID
Join this webinar for tips on how to support and prioritize student health and well-being during COVID.
Content provided by Unruly Studios

EdWeek Top School Jobs

CCLC Program Site Director
Thornton, CO, US
Adams 12 Five Star Schools
Customer Support Specialist, Tier 1
Portland, OR, US
Northwest Evaluation Association
Customer Support Specialist, Tier 1
Portland, OR, US
Northwest Evaluation Association
Customer Support Specialist, Tier 1
Portland, OR, US
Northwest Evaluation Association

Read Next

Federal Congress Again Tries to Pass Eagles Act, Focused on School Shootings After Parkland
A group of bipartisan Congressional lawmakers is once again trying to get a law passed aimed at preventing school violence.
Devoun Cetoute & Carli Teproff
2 min read
Suzanne Devine Clark, an art teacher at Deerfield Beach Elementary School, places painted stones at a memorial outside Marjory Stoneman Douglas High School on Feb. 14, 2019 during the first anniversary of the school shooting in Parkland, Fla.
Suzanne Devine Clark, an art teacher at Deerfield Beach Elementary School, places painted stones at a memorial outside Marjory Stoneman Douglas High School on Feb. 14, 2019 during the first anniversary of the school shooting in Parkland, Fla.
Wilfredo Lee/AP
Federal Some Districts Extend Paid Leave Policies as They Hope for Passage of Biden Relief Plan
With federal provisions having expired, some school employees have had to dip into their own banks of leave for COVID-19 purposes.
5 min read
Linda Davila-Macal, a seventh grade reading teacher at BL Garza Middle School in Edinburg, Texas, works from her virtual classroom at her home on Aug. 31, 2020.
A teacher leads a virtual classroom from her home.
Delcia Lopez/The Monitor via AP
Federal President Biden Is Walking a 'Careful Tightrope' When It Comes to School Reopenings
CDC guidance and confusion over his rhetoric turn up the pressure, and could overshadow progress in schools and nuanced public opinion.
9 min read
President Joe Biden answers questions during a televised town hall event at Pabst Theater in Milwaukee on Feb. 16, 2021.
President Joe Biden answers questions during a televised town hall event in Milwaukee earlier this month.
Evan Vucci/AP
Federal White House Unveils New Money to Aid COVID-19 Testing in Schools, But Says More Is Needed
Federal agencies will use $650 million to expand testing in schools and "underserved communities" such as homeless shelters.
2 min read
Image of a coronavirus test swab.
The White House announced new money to help schools test students and staff for COVID-19, but it said more aid is necessary to scale up those efforts.
E+