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Teacher Pay and Performance

Various groups, including politicians, some economists and some parents groups, from time to time call for greater accountability for teachers by introducing performance or merit pay. The assumptions are that students’ performance is principally related to teacher performance and that performance or merit pay will encourage better performance by teachers. There is a very common view that management and leadership mainly involves telling others what to do and sacking those who don’t. These views are both wrong and destructive.

Whilst there is near universal agreement that teachers are vitally important in the education of children in school, the frequent response in a number of countries is to try to quantify the contribution they make by relating the results of standardised tests to the teacher’s performance. Believing that the principal motivator of superior performance is more money, the outcome of the “assessed” performance is to pay bonuses to the teachers whose students did best. However, the evidence about improved student performance and changed teacher behaviour is a different matter: numerous studies reveal merit pay, as it is called, is unrelated to students’ test scores.  Moreover, the procedures for assessing teacher performance are often not adequate and the rewards often not related to the skills and experience attained.

In the first part of this essay teacher assessment and teachers’ careers is reviewed. The issues centre on motivations, recruitment and promotions policies and practices and the perceived place of teachers in the community. In the second part I deal with school leadership.

Performance and pay, employee behaviour, management and leadership are amongst the most intensively studied over the last more than one hundred years. The research is not simply anecdotal or confined to a few industries or countries but is vast, covers numerous different industries and economic sectors and activities from war to hospitals, museums to pharmaceutical companies and so on. There can be few areas, in general, where profound intellectual laziness is so common as in views about superior leadership and organisational development: if old myths aren’t followed new fads often are.

Many people are still prepared to look no further than their own industry or country or worse simply adopt the mantras of such largely irrelevant areas as classical economic theory or make simplistic comparisons with animal behaviour. Alternatively the largely speculative practices of the human resource management school which derives some of its guidance from such questionable approaches as psychological profiling are adopted. Often the result amounts to excessive bureaucracy with little gain or even decline in the quality of recruitment, training and development and ultimately productivity and quality of decision making.

In the area of leadership demands for quick decision-making, decisiveness and so on can be promoted without any regard to lessons of history generally, without attention to areas of human endeavour beyond the specific industry in which the enterprise is situated. In many cases in knowledge “industries” such as universities and museums practices such as leadership and management are held in such low regard by most of the workforce that anything to do with them is considered no more than administration. That indicates a lack of understanding that that activity amounts to no more than rule following, the antithesis of leadership. The difference that effective leadership makes is often ignored. An indication of the attention to school leadership is that an Australian academic who is one of the international leaders in the relevant studies never gets a mention in the debate and indeed leadership – unless it concerns devolution of authority over hiring of teachers and disposal of the budget – is largely ignored. No stories are told, no role models are mentioned.

The school environment, and the university environment, differs from that of other enterprises in the nature of the work, the goals, what ought to count as achievement and in the level of qualifications of the staff. But none of that means that  everything that might be learned from elsewhere can be safely put aside. Every organisation comprises people who, it is intended, will behave according to certain rules to achieve certain goals and are more or less controlled by persons who exercise power and authority, whether it is a Roman Catholic Seminary, a Wall St bank or the BBC, the activities of the European Space agency, the practices of successful hospitals and biomedical research institutes which count Nobel prize-winners amongst their staff, successful airline companies or major symphony orchestras.

We know a great deal about people’s attitudes to rewards and rules, people’s intrinsic motivations, the difficulties of achieving certain goals and the impact of short-term and long-term decisions. One example relevant to education will suffice to show the disjunction between existing knowledge and practice as it concerns achieving success. In the last two to five years, as we shall see later, substantial research has been completed covering the medium to long term in different areas including government service and commercial enterprises dealing with the impact of merit pay, the relationship of extra remuneration and performance. The results are clear: a positive and significant relationship does not exist. In other words, paying bonuses to executives, and importantly to teachers, does not have a significant effect on effort or results, of teachers or students.

When bonuses are paid, people try to make comparisons between their remuneration and that of persons whose work they consider roughly similar. However, motivation in high performance situations is mainly intrinsic and the basis of comparison is the individual’s previous achievements, not the performance of others. This is the same as the well known cases of athletes, many in the performing arts and in science. Comparison with peers is an element of the motivation but monetary reward hardly is. Yet in early 2012 government politicians in Britain decided they would ask education authorities to investigate the institution of merit pay for teachers!

Former Australian school principal and commentator Chris Bonner (in ‘Education: Fixing What’s Not Broken’, New Matilda 28 February 2007) said, “Proposing merit pay is a no-risk strategy for any government: Good teachers are essential and parents are always anxious about their children’s learning. It doesn’t matter that such messages are unbalanced, poorly researched or even mischievous, and have little to do with day-to-day life in your average school — it all makes good copy. It creates the impression of crisis, helped along by judicious political dog-whistling which ensures that the crisis somehow belongs exclusively to public schools.”

Michael Fullan of the Ontario Institute for Studies in Education (OISE) at the University of Toronto and education adviser to the government of Ontario is quoted in Brian Caldwell and Jessica Harris’ Why not the best schools (ACER, Melbourne 2008) as observing, ”performance-based merit pay is a non-starter … when commonsense tells you it won’t work, when no research exists that backs up the claim for merit pay . . . it is time to give up the ghost”.

What is important is the belief that one is making a difference through the work being done, a sense of contributing to improvement of the community and/or the group with whom one is working. Teachers, like other professionals and creative people, often spend more time than they could possibly be paid for because of their commitment to these goals and values.

Any system which recognises performance and provides rewards or sanctions requires clear criteria for assessment and an objective process for their application. The scheme must have salience with those to whom it applies. Systems which seem to reward people with promotion, extra pay or opportunities for reasons other than generally acknowledged superior performance judged by accepted criteria is demotivating generally.

Any performance evaluation scheme should lead to adoption of new or improved behaviours more likely to enhance the value of the contribution. Indicators of performance relevant to that are essential but metrics may not always be appropriate and indeed choosing quantitative indicators because they are quantitative can lead to irrelevance. Assessment of performance is a judgement call, in other words a task of leaders. Extraneous indicators like rewards for achievement not relevant to the principal goals of the person and the organisation divert attention and contribute nothing to the future of the organisation.

In many domains performance evaluation is poorly done, uneven, not linked to any clear methodology and therefore regarded with suspicion or cynicism by employees. The nature of the reward may be unrelated to the means of achieving the goals of the organisation. Reputational studies in which good practice is defined by the behaviours of those whom peers consider to be good teachers are of doubtful validity, as Graham Nuthall says.

Evaluation programs and linked reward schemes should seek to retain those employees – teachers – who are superior. Notwithstanding that, as the 2005 and 2006 OECD and ACER reports note, “career paths and pay systems can be, and need to be, linked to evidence of increasing capacity to promote valued student learning outcomes and, thereby, stronger levers for ensuring professional development and quality learning outcomes for all students”.  Those goals are unequivocally fundamental to the school enterprise.

Performance evaluation is sometimes posed as a way of identifying those whose performance is unsatisfactory and who should therefore be “let go”. Having in mind that positive reinforcement is a greater motivating factor than negative reinforcement such an approach is hardly effective! Performance management is appropriate when it leads to improved performance, not when it is simply a way of dismissing those whose performance is not presently satisfactory. High standards should be set and people assisted to meet them. That is what happens in successful organisations.

Teacher performance and evaluation

Schemes to evaluate teachers’ performance linked to rewards of any kind need to encompass the full scope of what a teacher is expected to know and what they can show they can do; they require multiple, independent sources of evidence and multiple, independent trained assessors of that evidence as well as have regard to the context in which the teacher is teaching.

Elizabeth Kleinhenz & Lawrence Ingvarson of the Australian Council for Educational Research, Australia (reported in ‘Teacher Accountability in Australia: current policies and practices and their relation to improvement of teaching and learning’, Research Papers in Education 19 (1), March 2004) investigated the processes for teacher assessment. They begin, “If teaching well is something most teachers can learn to do over time, not just a bundle of personality traits, insightful formative assessment and coaching systems are vital. If experienced and effective teachers are to be kept close to the classroom and provide leadership to other teachers, professionally credible summative assessments systems will be needed that can provide them with the recognition they deserve for evidence of high levels of professional development.” They observe that often teachers’ real work remains buffered from the kind of professional scrutiny that could contribute to its improvement and genuine leadership is absent. Many teachers are never evaluated.


Often promotion involves higher pay but then requires tasks not relevant to teaching and for which the appointee lacks training. This is referred to as ‘loose coupling’, a term developed by management expert Karl Weick (in ‘Educational organizations as loosely coupled systems’, Administrative Science Quarterly, 21, 1976) to describe the gap between the technical core, rewards and ‘actors’.. “… management of the structures and processes that surround the technical core of education is quite separate from management of the core itself. Although it may seem that educational management is about managing the processes of teaching and learning (the technical core), it is, in reality, nothing of the sort. Instead what is managed is things like student grouping, school organization, timetabling and major school events.

In New South Wales, a review by Gregor Ramsey in 2000 (‘Quality Matters Revitalising teaching: Critical times, critical choices’, Report of the Review of Teacher Education, NSW Department of Education and Training, Sydney, New South Wales, 2000) argued “good teaching does not come about through imposed requirements, but through the individual teacher’s commitment to high professional standards. The important changes needed in teaching are those that teachers must make for themselves. They are not changes that governments can mandate or unions can achieve through their industrial activities.”

Kleinhenz and Ingvarson found the Western Australian Level 3 Classroom Teacher position to focus most effectively on the technical core of teaching. Evaluation was summative, criterion-based, and used multiple sources of data to demonstrate attainment of a particular standard of professional knowledge and skill;teachers are assessed by a ‘college of specialists’. Evaluation starts with the explication of teachers’ work in a comprehensive set of professional teaching standards (called ‘competencies’), proceeds through processes of assessment that encourages professional learning, and continues into the ongoing work of the successful applicants.

In New South Wales all teachers have to be accredited with the Institute of Teachers, as described by. ‘The Framework of Professional Teaching Standards’ provides a common reference point to describe, celebrate and support the complex and varied nature of teachers’ work. The Professional Teaching Standards describe what teachers need to know, understand and be able to do as well as providing direction and structure to support the preparation and development of teachers.”

In the US the National Board for Professional Teaching Standards (NBPTS) provides a voluntary certification system for teachers to who can demonstrate they have attained its standards for ‘highly accomplished’ teaching. The process resembles that described for Western Australia. A survey in 2001 found that NBPTS was an excellent professional development experience, had a strong and positive effect on their teaching, had positive effects on students’ learning and led to positive interactions with teachers, administrators and communities.

In 2011 the Grattan Institute released a report Better Teaching Appraisal and Feedback. The report examines eight methods of teacher appraisal and suggests that schools use at least four of them to effectively appraise teachers’ performance through a balanced scorecard approach.

In summary, schemes which unequivocally linked its implementation to improved student performance are generally lacking.  Though there is a strong desire to provide greater recognition to teachers no consistent pattern to the definition of highly accomplished teaching or methods for assessing performance across schools.

Merit Pay

Teachers operate in a ‘social market’.  Professor Dan Ariely, Alfred P. Sloan Professor of Behavioral Economics at MIT, with various colleagues (James Heyman and Dan Ariely, ‘Effort for Payment: A Tale of Two Markets’, Pscychological Science 15 (11), 787-793, 2004 & Dan Ariely et al, ‘Large Stakes and Big Mistakes’, Federal Reserve Bank of Boston Working Paper No. 05-11, 2005) has examined the relationship between behaviour and effort and the nature of rewards in money-markets and social-markets. “… in social-market relationships (unlike money-market relationships) effort is shaped by altruism, the amount of compensation is irrelevant, and individuals work as hard as they can regardless of payment. Altruism results in a level of performance that is high, constant, and insensitive to payment level. … rewards can decrease motivation and attitudes alter self-perception, increase over justi?cation and turn feelings of competence into feelings of being controlled.”

There are several recent studies which are both comprehensive and conclusive.

The Rand Corporation, in a 2010 report by Brian M. Stecher and others reviewed the progress of Performance-based Assessment Systems (PBASs) in the public service in the U.S. PBASs were a response to increasing size of public and private organisations: measuring performance was an early response followed by linking performance to incentives “in an effort to motivate and direct individual performance and improve organizational outcomes”.  While the use of PBASs has spread in the public sector, little is known about whether such programs are having the desired effect: there is currently little evidence concerning the effectiveness of PBASs at achieving their performance goals.

The Education Commission of the States in the U.S. is an independent, non-profit, non-partisan think tank based in Washington, DC comprising some 200 senior corporate executives and university leaders concerned with policy research on major economic and social issues which provides information to help state leaders develop educational (and other) systems. In 2010 it summarised what is known about merit pay systems in ‘Teacher Merit Pay: What Do We Know?’.  They listed the five “enabling conditions” which the Committee for Economic Development required for a successful merit pay system which fostered improvement in student achievement. These are improved teacher evaluation and development systems, improved data systems, sustainable funding, supportive government policies and wide stakeholder involvement.

Of the many school district merit pay systems, the Commission considered four to be of particular interest and evaluated their effect on student achievement. Generally there was either insufficient data or a lack of evidence supporting a link with student achievement gains. The Commission concluded, “Perhaps merit pay does not contribute to student achievement.”

Nevertheless, as SOS’s Trevor Cobbold observes, the Teacher Incentive Fund (TIF) introduced by President George W. Bush to help school districts implement merit pay systems has been dramatically expanded by President Obama in his ‘Race to the Top’ school funding program.

In July 2011, the Rand Corporation published a report on the New York City Schoolwide Performance Bonus Program (SPBP). Performance bonuses were found to not achieve any of their intended effects, have no positive effects on student achievement at any grade level in schools and no positive effect on how schools performed on annual school progress reports. The scheme was recommended to be not continued: the New York City Education Department did just that.

A survey of over 200 New York City public schools by Roland Fryer of Harvard University’s Department of Economics found no evidence whatsoever that teacher incentives increase student performance, attendance, graduation or teacher behaviour.

The Australian Productivity Commission noted very poor evidence to support merit pay related to student test scores.Their report also noted that the latest Bureau of Statistics data indicated that average real salaries for both teachers and the education and training sector as a whole have increased over the past 15 years but the rate of increase in teacher pay had not been as fast as salaries in other professions. According to the OECD teachers’ salaries in Australia have not changed in real terms between 1995 and 2009.

In early 2011, Australian Prime Minister Julia Gillard announced that a scheme to offer bonuses to “the country’s best teachers”.  An estimated 25,000 teachers, or around one in 10, were to receive incentives under the scheme. The Business Council of Australia endorsed the proposal. Numerous experts on education condemned it.

The Government radically modified the original scheme to reward teachers. “A new performance and development framework for teachers will also be introduced in schools across Australia from 2013 as part of the implementation of the reward payments scheme. The Teacher Standards are world’s best practice and raise the bar on teacher quality. By aligning our rewards with the Standards, we’re ensuring that those teachers who go the extra yard will be recognised…”

In May 2012, the OECD Education Directorate, in a report by Marilyn Achiron, (‘Another perspective on teachers’ pay’ posted May 15, 2012) and a report ‘Does performance-based pay improve teaching?’ noted the increasing prominence of teachers’ pay in the political agendas of many countries, reported on the varying practices in OECD countries. There is considerable variation in practice. “A look at the overall picture shows no relationship between average student performance in a country and the use of performance-based pay schemes… In countries with comparatively low teachers’ salaries (less than 15% above GDP per capita), student performance tends to be better when performance-based pay systems are in place, while in countries where teachers are relatively well-paid (more than 15% above GDP per capita), the opposite is true.”

Teacher Certification, Evaluation, Career Paths and Rewards

The wish to reward more effective teachers and have better teachers stay longer in the profession is entirely comparable to the situation in all other areas of employment. In Finland and other Scandinavian countries and also Korea, as reported by Miyoung Hong and others (‘Factors Mediating the Quality of Teacher Workforce: Finnish and South Korean Cases’ National Association for Research in Science Teaching (NARST)) Conference Abstracts 2010) teachers are highly respected in the community, salaries offered are high and teachers are well qualified: competition to gain entry to the profession is intense. In many other countries such as the U.S., the U.K. and Australia, to an extent, teachers are not well regarded: they are criticised as not knowing enough about the content they teach, for having long holidays, working shorter days than other ‘workers’. They are frequently criticised in the media and very it is asserted “failing” teachers should be sacked. Noticeable also is the parsimony with which teacher pay claims in the public sector are treated, though this is generally a feature of the way all pay claims are handled.

Rather than dealing with issues such as conditions of work like adequacy of space, access to computers, availability of training and development opportunities and conditions for promotion, bargaining with unions often allows continued pursuit of issues such as teacher/student ratios, that is class sizes, which is important but not closely related to superior teaching unless we are faced with very large classes or classes with special needs.

In a report prepared for the Australian Business Council (BCA) by Stephen Dinham, Lawrence Ingvarson & Elizabeth Kleinhenz (of ACER) (‘Investing in Teacher Quality: Doing What Matters Most’ p 5-52 in Teaching Talent The Best Teachers for Australia’s Classrooms, Melbourne: Business Council of Australia, 2008)  earlier commentary of Kleinhenz and Ingvarson is carried further. “Salary may not bea strong reason why current teachers have chosen to teach, but it is a strong reason why many abler graduates choose not to teach, and this is cause for considerable concern … salary and working conditions are the main reasons why many good teachers leave the profession. Present arrangements in teaching do not encourage, reward or indeed require advanced professional learning.” The report for the BCA recommends a national scheme for certification of teacher performance.

A recent initiative in Australia has been the introduction of “Teach for Australia”: university graduates are given a short period of intensive training in teaching methods and relevant subjects and then sent into schools. In June 2014 Education Minister Christopher Pyne announced a $22 million boost to the program. In July 2014, the media reported a contract to train graduates for this program was let to Deakin University. The Australian Education Union had earlier criticised the program but the State Government of Victoria asserted that “Universities and colleges are failing to produce teachers who meet the needs of Victorian schools”. Melbourne University’s tender was unsuccessful, its criticism – that “Programs like Teach for Australia – while five times more expensive than traditional programs – are increasing despite an absence of a reasonable evaluative basis to continue this support” – was removed from its website after protest by “Teach for Australia” and it initiated a parallel program to train teachers.

These programs are substantially grounded in the proposition that a significant problem in teaching is that teachers lack sufficient content knowledge. “Teach for Australia” is based on the program “Teach for America” (TFA). Linda Darling-Hammond of Stanford University and colleagues examined that program. They found, “uncertified TFA recruits are less effective than certified teachers, and perform about as well as other uncertified teachers”. TFA recruits who become certified after 2 or 3 years do about as well as other certified teachers but nearly all of them left within three years. “Teachers’ effectiveness appears strongly related to the preparation they have received for teaching.” Education historian Diane Ravitch agrees.

The OECD publication, Education at a Glance for 2010 compares the salary conditions for teachers throughout the OECD and ‘partner’ countries. Teachers in countries like Australia, England and New Zealand receive relatively lower salaries and work longer hours than teachers in countries such as Finland whose students perform to very high levels. Teachers in the U.S. are amongst the lowest paid in terms of salaries per unit of time; a lower secondary teacher spends 1,097 hours per year compared with an OECD average of 703 hours and a European average of 661 hours. In Finland only 592 hours are taught and 616 hours are taught in Korea.

Unions are often blamed for holding back needed reforms. However experience in several countries shows a contrary position. In Ontario unions played a major role in the introduction of the reforms which have been so successful, as reported in the OECD’s 2010 Report, Strong Performers and Successful Reformers in Education: Lessons from PISA for the United States. Premier McGuinty came into office committed to involving the teachers’ union and agreed increases in staff for special positions to lead the process of driving higher performance by children of migrant parents whose first language was not English or who were otherwise disadvantaged and also agreed increases in teacher numbers to reduce class sizes. In Germany education reforms have been significantly assisted by the unions.