Vanderbilt study: Merit pay for teachers improves student performance

A new study from Vanderbilt University concludes, as Education Week puts it, that “merit pay for teachers can lead to higher test scores for students.”

Vandy’s study points to an interesting policy idea for merit pay. Click the “Read more” link to learn about that.

Merit pay clearly can be a useful tool to motivate employees. After all, as “The Balance” web site points out:

“All-in-all, merit pay is the best way to reward the employees that you most want to keep.”

The Balance also correctly denotes:

“Nothing demotivates a high performer faster than knowing that the employees who have contributed much less in the organization, have received the same pay increase.”

That surely must be true in education, too.

The new Vandy study points out that teacher pay today is primarily determined by a single salary schedule based on highest degree earned and years of experience. That’s the general case in Kentucky.

However, the Vandy team says degrees earned and years of experience have a low correlation with student outcomes. In fact, such a system can weaken teacher motivation to exert more effort (Sound like a familiar problem?). In other words, Kentucky isn’t basing teacher pay on things that really matter for student performance.

Why is this happening in the Bluegrass State? One reason is general teachers’-union animosity toward merit pay. After all, if you have merit pay, someone has to make some sort of performance judgment about how teachers are performing. The union hates having teachers evaluated, siding with comments in the Vandy report that:

“Critics of merit pay contend that assumptions made by principal-agent theory do not hold in teaching. They argue the difficulty inherent in creating a reliable process for identifying effective teachers, measuring a teacher’s value-added contribution, eliminating unprofessional preferential treatment during the evaluation process, and standardizing assessment systems across schools.”

But the Vandy report says those merit-pay-for-teachers critics are wrong.

It’s encouraging that the Vandy team found merit-pay programs growing and that the results of their analysis of 44 separate studies associating merit-pay approaches showed modest positive impacts of such compensation policies on student test results.

The Vanderbilt report also looked at 15 studies to examine whether merit pay helps with retaining teachers. Six of the studies found mostly significant positive impacts on retention while another seven studies showed some positive impacts but with inconsistency in the findings. Only two of the 15 studies showed mostly insignificant impacts.

One very interesting result from the Vanderbilt study is that “group incentives result in larger positive effects on average than incentives given to individuals.”

This group merit-pay approach apparently enhances collaboration among teachers and could be an important ingredient in a Kentucky merit pay policy.

The Vanderbilt team says more research on merit pay for teachers is needed, but clearly this is an avenue that Kentucky needs to start considering.

Extra Note: Kentucky does have at least one merit pay system, which is part of the AdvanceKentucky program for Advanced Placement courses. When an AP student earns a 3 or higher on the 5-point scale for AP exams (a score that usually provides college credit for the course), the teacher gets a $100 bonus. If a teacher has a large number of AP students earning 3-or-above scores, this can provide a nice little boost to the annual salary.

By the way, this merit-pay provision in AdvanceKentucky might explain why the Jefferson County School District, which seems to walk in dread of its local teachers’ union (which has at times put up as much as $100,000 or more to support an individual school board candidate’s election campaign), which didn’t allow any of its schools to participate in this outstanding program for a number of years after AdvanceKentucky came to the state. If this indeed was happening, it offers yet another example of how adult interests trump what’s best for students in the Bluegrass State.