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Performance
Pay and Teacher
Motivation
BARRON
Although proponents of performance pay often assume that this myth is a truism, research from management, finance, and economics provides a mixed picture of the effectiveness of performance pay in increasing productivity. An early review by Locke and his colleagues (1980) argued that individualized pay for
performance systems increased individual productivity over other methods. However, more recent reviews
using larger samples and more sophisticated meta-analytic techniques demonstrate that these effects
CHRIS S. HULLEMAN is an assistant professor of graduate psychology at the Center for Assessment and Research Studies, James
Madison University, Harrisonburg, Va. KENNETH E. BARRON is an associate professor of psychology at James Madison University, Harrisonburg, Va.
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Research from
management,
finance, and
economics
provides a
mixed picture
of the
effectiveness of
are limited in several important ways. Monetary incentives increase performance quantity but not quality. Monetary incentives are effective in manufacturing, but not in service firms, and they work for simple but not complex tasks (for a review, see Gagne
and Forest 2008).
In some countries, part of the problem is getting
teachers to show up in school and be present in the
classroom (Springer 2009), thus incentives to increase the quantity of teaching may be effective in
those cases. However, in the United States, creating
more effective teachers is more about the quality of
what happens in the classroom. The tasks of teaching are by far not simple, and the skills required are
more professional than industrial; thus, the results
of this research suggest that performance pay may
not be effective in improving teaching performance
in the United States.
performance
May 2010
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tween company performance pay policies and employee reports of intrinsic motivation (Fang and
Gerhart 2005), and a U.K. study showed increases
in job satisfaction with performance pay for the
highest paid workers and decreases in satisfaction
for the lowest paid workers (McCausland, Pouliakas, and Theodossiou 2005). Clearly, more research is needed. However, this research hints that
performance pay could positively influence intrinsic
motivation if the reward signifies high-quality performance and increases the value of engaging in the
desired behaviors.
Myth #3: Effective performance pay systems are
relatively free from adverse side effects.
Besides undermining intrinsic motivation, performance pay programs have other potentially negative consequences. In performance-based systems,
employees may simply neglect quality for quantity
on the performance indicator, such as when teachers instruct students in test-taking skills, rather than
teaching them to understand the material at a deeper
level (Kaufman 2008).
Second, performance pay systems designed on
quantitative outcomes are highly susceptible to goal
distortion, gaming, and other unethical behaviors
(Rothstein 2009), especially when based on such
narrowly defined outcomes as standardized test
scores. There are numerous examples of educators
altering test scores, holding low-performing students out of testing, and assisting students with testing (for example, Dewan 2010; Springer 2009).
Third, quantitative outcomes often fail to capture
the full breadth of expected outcomes and behaviors. Although standardized tests are widely used as
measures of student learning, their proliferation is
due more to their ease of administration than to the
belief that they actually capture the full range of student learning. Organizational researchers have
noted this deficiency in outcome measurement: It
is quite difficult to establish criteria that are both
measurable quantitatively and inclusive of all the important job behaviors. . . if an employee is not evaluated in terms of an activity, he will not be motivated
to perform it (Lawler 1971: 171).
Broadening the outcomes used to evaluate student
performance could reduce or eliminate these problems. More research needs to address the effect of
including subjective ratings and other qualitative
performance measures.
Myth #4: Performance pay wont work because
teachers are already motivated and working as
hard as they can.
When performance pay plans are effective in industry, about half of the increase in productivity oc-
Before considering whether schools and businesses are similar enough to substantiate this myth,
consider the pervasiveness of performance pay programs in business. Several large-scale national and
international surveys indicate that only 16% to 30%
of employees reported receiving some type of performance pay, and only 6% of employees are in ongoing performance pay systems. The percentage of
overall earnings that bonuses represented was also
small, at around 6%, with most performance pay occurring in sales-related occupations, such as finance
and real estate (Adams and Heywood 2009).
Although schools have employees, budgets, and
bottom lines, the product of education is not simply
a good or service, but rather a quality of student that
is difficult to measure and not universally agreed on.
Moreover, employees who enter the education field
are likely doing so for reasons quite different from
Performance
pay systems
could help
provide critical
feedback to
teachers and
increase the
value of acting
on that
feedback.
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Only 16%
to 30% of
private-sector
employees
reported
receiving some
type of
performance
pay, with only
6% of
employees in an
ongoing
performance
pay system.
view of the literature, a definitive answer is not apparent. Our inability to reach definitive conclusions
regarding the five myths is due, in large part, to the
lack of research on performance pay in education.
Even researchers in other fields, who have a much
more extensive research base on performance pay,
have noted that: Additional research is sorely
needed. . . studies that include control groups, intervening process variables, and/or careful longitudinal
analyses (Rynes, Gerhart, and Parks 2005: 594).
Several large-scale studies are currently filling that
void. The federal government has played a major
role in funding many of these projects. In 2006, the
National Center on Performance Incentives was
chartered by the U.S. Department of Educations
Institute of Education Sciences to focus on performance incentives in education. Recently, President
Obama announced his Race for the Top, which
provides education funding to states contingent on
including performance pay in their spending plans.
The ongoing research will need to address several important issues. First, a direct link between
teacher behaviors and outcomes is absent. Teachers
work with students on a daily basis, and at the end
TABLE 1.
Fiction
or Fact? Conclusion
Myth
Performance pay systems
improve performance.
-1
Although early research supported this belief, more comprehensive and technically sophisticated research
puts important limitations on the effectiveness of performance pay for improving worker productivity. Much
work is needed to evaluate its effect in K-12 education.
+1
The undermining effect of rewards on intrinsic motivation hasnt been demonstrated in actual work settings.
In addition, the value of rewards when combined with feedback about effective performance can
signify competence and further energize effective performance.
When focused on quantitative outcomes, goal distortion and unethical behaviors have been witnessed in
accountability and incentive systems in education. Enriching the outcomes used to evaluate performance
could reduce or eliminate these problems, but this idea is untested by research.
Teachers work long hours, engage in many hours of professional development each year, and are motivated
to make a difference in the lives of students. However, improving teaching productivity may not simply be a
matter of working harder, but about working more effectively. Pay for performance systems can help provide
teachers with feedback and increase the value of acting on that feedback (resulting in an incentive effect). In
addition, if more effective teachers replace ineffective teachers, then the system as a whole becomes more
effective (resulting in a sorting effect).
There are documented differences in motivation between public- and private-sector employees, and these
differences could rend performance pay programs less effective in education. Furthermore, performance pay
might alter the public-service ethos of education by selecting teachers with aspirations tied more closely to
making money than doing public service. Although research suggests that even educators can be motivated
by money, there is no evidence that the effects of performance pay depend on money motivation.
Overall
Overall, almost all of these myths contain both fact and fiction. More research, particularly in education, is
needed before definitive conclusions can be made about the effectiveness and suitability of performance pay
for K-12 education.
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