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What you need to know about merit pay for teachers (and why)

By Dana Goldstein

With President Obama and Secretary of Education Arne Duncan hinting that school reform could be the big bipartisan focus of 2011, it’s an exciting time to be an education writer. At Time, Andy Rotherham outlines why it could be difficult for Democrats and Republicans to work together on education nevertheless; in short, the standards and accountability movement that rose to prominence in the 1990s and coalesced around No Child Left Behind is under attack from both the conservative wing of the GOP and (to a lesser extent) the liberal wing of the Democratic Party, both of which are skeptical of standardized testing and top-down education mandates.

But that doesn’t mean there won’t be movement. For reasons I explain over at my blog, if an education policy compromise does emerge between the Obama administration and the John Boehner-led Republicans, it will probably be around merit pay for teachers. So it’s worth explaining what the trends are in merit pay and what the best social science research tells about the efficacy of the policy for raising student achievement.

What’s happening on merit pay for teachers? The Obama administration has offered states billions of federal stimulus dollars if they agree to change the way teachers are paid, evaluated and trained. Performance pay is a big part of that push, and states including Colorado, Louisiana and New York have responded by passing laws promising to tie teacher evaluation and pay to how well students perform academically.

Meanwhile, Washington’s outgoing schools chancellor, the (in)famous Michelle Rhee, last year instituted the nation’s most aggressive merit pay program to date, which uses private philanthropic funding to offer public school teachers achievement bonuses of up to $10,000 in exchange for weaker tenure protections. The teachers’ unions in Seattle, Pittsburgh, Denver and a number of other cities have also agreed to contracts that include some form of performance pay, a major break from the traditional lock-step salary ladder for teachers, based on degrees attained and years on the job.

How is teacher performance measured in these plans? This is undoubtedly the most controversial aspect of merit pay. Most of the new performance pay laws and union contracts measure “effectiveness,” at least in part, by looking at how well a teacher “grows” his or her students’ test scores from one year to the next. The best and fairest way to measure this growth is through a statistical tool called “value-added measurement,” which is championed by economists who study the teacher labor force. Value-added equations attempt to control for factors such as class size, years on the job, and students’ race and poverty while measuring how much of an impact teachers have on kids. (Click here to see a sample New York City value-added report.)

But value-added is a relatively new technique and hotly debated in academic circles; even its defenders, innovative young economists like Doug Harris and Thomas Kane, have urged caution, as have the Educational Testing Service, the National Research Council and the Department of Education’s own Institute for Education Sciences. Outright opponents, such as a coalition of education experts convened by the liberal Economic Policy Institute, raise a number of powerful objections: that value-added measurements are based on flawed standardized tests; that the ratings are particularly volatile (a teacher who scores very well or very poorly has only a one-third chance of getting a similar score the following year); and that the technique gives the impression that the teacher is the only factor that matters to student achievement, ignoring parental involvement, afterschool tutoring and other “inputs.”

There are also a number of practical problems in using value-added measurement as a way to reward or punish teachers. Many educators do not teach tested grades or subjects, including early childhood teachers, art teachers, music teachers and the like. It is also unclear what effect competing for bonus pay will have on the climate within schools, where students are best served when teachers share best practices. Then there is the overarching concern that paying teachers according to student test scores will lead to “teaching to the test” — a real problem, especially considering years of research showing that NCLB severely limited the curriculum in low-income schools, leading to lots of reading and math drills, and not so much fun science experiments, art projects and journal writing.

So does merit pay work? It’s too soon to say whether merit pay for teachers based on value-added measurement really attracts and, more important, retains high-quality teachers in low-income schools. Surveys consistently report, though, that factors other than money — such as an orderly school, a supportive principal and good facilities — are what teachers value most.

There is more to work with when it comes to the effect of merit pay on student achievement. A study of the pay system in Nashville echoed earlier results found in Colorado, Texas and Florida, finding that bonuses alone do not make teachers better at raising student test scores. The implication is that most teachers are already working as hard as they are able to, so throwing more money at them won’t improve performance. Proponents of merit pay, however, say these studies don’t tell us much, because so far, most bonuses are not being distributed along with high-quality teacher training and improved professional development.

In short (and I know this has been a long post), the federal investment in teacher merit pay based on value-added measurement is based in large part on faith in data and on the hope these programs will make teaching a more attractive profession to ambitious, results-driven people. There is no hard evidence that these policies have been transformative in the places where they have been deployed. But neither is there proof that, especially when used in conjunction with other, more subjective measures, value-added measurement of teachers will have a corrosive effect on teaching and learning. The key, as my Teachers College adviser Luis Huerta told me recently, is not to allow value-added measurement and merit pay to “over-rationalize” education, which is, at its heart, a deeply subjective, cultural, and even artistic process.

Dana Goldstein is a contributing writer to the Daily Beast and the Nation, and is a Spencer Education Journalism Fellow at Columbia University. Read more of her work at

By Dana Goldstein  | November 5, 2010; 11:59 AM ET
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Tell ya what, when we have true merit pay for corporate executives, then we can look into merit pay for teachers.

Posted by: RobInFL | November 5, 2010 1:59 PM | Report abuse

My big problem with merit pay is just that it perpetuates the myth that the reason education costs so much is because teachers are paid a lot. This is not true. The growth in the cost of education has occurred for two reasons:
a) Increases in the number of employees in school districts, particularly in special education, administration, and supplementary services.
b) The fast increase in health care costs, which has made any labor-intensive industry much more expensive.

The biggest driver of education reform is a weak economy, that, as you say, will push more well-educated and results-oriented people into teaching. If districts can capitalize on this larger supply of labor to improve the teaching force, more power to them, but we shouldn't treat it as a moral transaction in which weak-willed teachers are being finally spurred into giving their all to their students. Moreover, there is a real danger that in the next few years we deprofessionalize and destabilize one of our nation's few remaining long-term career paths, that we as a society put more scorn on the merit of pouring three or four decades of your adult life into a school and a community, and that we succeed in helping children reach quantitative academic benchmarks, at the cost of weakening our schools as a center of democracy and community.

Teachers are a particularly convenient locus of disdain for our elites, who spent decades of their life observing the poor schlubs who surely knew so much less than this or that future best-and-brightest , and much of the current reform agenda-- and its glowing, TFA-infatuated reportage-- bears the smudges of classism and a sneering disregard for those rumpled lumpens, stooped with chalk dust all over them. That this technocratic contumely is currently married to (or at least in passionate embrace with) the pervasive loathing of unions endemic of Republicans and business elites, does perhaps suggest that further federal legislation is a possibility in the next two years, but the vehemence of the rhetoric of reform, unmoored to any acknowledgment of the particular fiscal structures or the Byzantine layers of bureaucracy that are the true distinction of our American school system, seems to me likely to produce a weakening of a profession without much benefit to the young.

Posted by: jacobh | November 5, 2010 2:10 PM | Report abuse

is the Democrart base not already suffieciently bummed out? Whatis the sense in going after the teachers? This would be like republicans going after big agra, big oil etc.

Posted by: sash64 | November 5, 2010 4:41 PM | Report abuse

I don't want merit pay. Too many weaknesses and too much possibility for manipulation. I just want a fair paycheck. I work hard at my job, and merit will not make me work harder because I am already working hard.

Posted by: jlp19 | November 5, 2010 5:37 PM | Report abuse

Take the merit pay and spend it on behavioral intervention and psychological services for kids with emotional and behavioral disorders - or for helping teachers deal with these kids.

Posted by: jlp19 | November 5, 2010 5:41 PM | Report abuse

There is a factual error, Dana. There is NO performance pay in the Seattle School District.

Although the Seattle superintendent sought this in the recent contract negotiations, the parties did not ultimately agree to this. It was not acceptable to Seattle's teachers and their organization, the Seattle Education Assn.

Kraig Peck

Posted by: kpeck1 | November 5, 2010 8:52 PM | Report abuse

The glib opposition to "standardized" testing is ridiculous. Are these people opposed to standardized tests but not opposed to non-standard tests?

We need standardized tests for a very simple reason. Without it, there is no way to compare the subjective evaluations of students in different states, districts, schools, and classrooms.

Without it, I would have spent more years being bored in math class instead of being allowed to progress at my own pace. I was sitting in third grade math, helping other kids from with their work, not learning anything. We moved across the country school to a school which didn't force you to cover topics for which you could pass a pretest. I was able to cover three "years" worth of topics per school year, until we moved again and the glacial pace resumed.

Merit pay by a simplistic formula does seem a little brain dead. Surely though, merit pay in general is better than just paying teachers based on how many years they have been working. If a teacher is bad enough, he or she is fired. Should there be no compensation in the range between being fired and a full salary? Merit pay in and of itself is a key tool of compensation programs, and there are a variety of ways to determine merit.

There are also many forms of compensation and recognition of merit beyond pay. Teachers are appointed as head of departments, some are given the responsibility of helping to design the curriculum. Should these also be merit agnostic? Is it so difficult to measure effectiveness in teaching? I can think back to all of the teachers I had in school and very clearly point out the ones that did barely anything beyond, and often far less than, what could be gained from a reading of the textbook.

We must not be so shy with pay that we fail to assess its value as an signal of recognition for our efforts. If the person next to me is putting in the minimum effort required to get by with minimal effectiveness and I am shining, there is a bit of disappointment in knowing that he or she is just as or perhaps more well compensated than I am. Should we drop "best teacher" awards as well, or at least ensure that they have no cash value?

Really, opponents of merit pay are treading into some of the same kind of equal results over equal opportunity logic that is so damaging in the rest of our modern society. They would be well served to reconsider.

Posted by: staticvars | November 6, 2010 12:48 AM | Report abuse


After seeing the falsity of merit pay in the business world for almost 30 years, I don't support it in the education world.

In business, the boss's friends get all the money and the best jobs. Very little is based on merit although businesses claim they pay people based on merit.

Posted by: educationlover54 | November 6, 2010 11:40 AM | Report abuse

"The glib opposition to "standardized" testing is ridiculous. Are these people opposed to standardized tests but not opposed to non-standard tests?"

Yes, I am opposed to non-standardized tests. They should be replaced with projects. Tests are non-productive.

By the way, you don't appear to know about the weaknesses of standardized tests.

Posted by: educationlover54 | November 6, 2010 11:42 AM | Report abuse

Here is my favorite quote: " It is also unclear what effect competing for bonus pay will have on the climate within schools, where students are best served when teachers share best practices."

Actually, no, it isn't unclear. Teachers will stop sharing best practices with each other if doing so will jeopardize their bonuses.

Why is it that this generation of data-oriented policy wonks sees how obvious it is that if you pay better teachers more, teaching will get better, but when the downsides of merit pay are suggested, then it becomes "unclear"?

You think Wall Street Traders provide tips on good trades to their colleagues on the trading floor?

And, btw, once you acknowledge that value added scores are unlikely to be consistent from year to year in 2 out of 3 cases, how can you possibly suggest that they might be worth trying out?

Posted by: teacheradam | November 6, 2010 9:06 PM | Report abuse

Ah me. Neither the concept of "merit pay" nor the concept of "standardized test" will long survive the digestion, pasteurization, homogenization, and regurgitation process of teacher's unions and education bureaucracies.

It will all be reduced to defined "indicators" on which they will receive in-service training in achieving and the education system will continue to roll over the needs of students in the interests of the teacher unions and education bureaucrats.

You want your kids to get a good education? Make sure they value education. Supervise their homework. Get involved in the school and educate yourself about what's going on. It's entirely your responsibility and don't forget it for a minute.

Posted by: bgmma50 | November 6, 2010 9:18 PM | Report abuse

Tests are a useful pedagogic tool that can tell an individual how far he or she has progressed in mastering a subject. They should only be used for that purpose. Certainly not for reward or punishment or as a profit-making business.

Posted by: harold3 | November 7, 2010 3:02 PM | Report abuse

The most important thing to consider when contemplating reform is the outcome for the children. Will merit pay change anything for students? No, because teachers aren't motivated by bonuses and nor should they be. Teachers should be focused on their practices and what's best for the students in front of them and not on how much money they can make if their students do well on tests. I just don't understand why non-educators don't see how corrupting merit pay can be, as popularly defined. What is worthy of merit? The current system sees longevity as meritorious as it takes years for a teacher to learn and refine her craft. Is there a way to reward teachers for teaching in inner-city schools? Or how about rewarding teachers who volunteer their time to tutor low performing students before and after school? What about veteran teachers who take new teachers under their wings and spend hours of time showing them the ropes? What about that teacher who knows how to handle difficult kids and so, year after year, has classes stacked with behavior problems because, well, she can handle it? Then there are teachers who take it upon themselves to make sure certain children get to school, have breakfast, raid the lost and found for coats for kids who are without, etc. How do we reward those teachers?

Posted by: lkayed | November 7, 2010 3:14 PM | Report abuse

What does anyone want to bet that the funding for this under a republican congress will be arranged so that "merit pay" means "who gets to keep their current inflation-adjusted income" and additional teacher training and dissemination of best practices mean a pile of photocopies in the break room?

Posted by: paul314 | November 8, 2010 9:13 AM | Report abuse

" Many educators do not teach tested grades or subjects, including early childhood teachers, art teachers, music teachers and the like. It"

In Prince George's County, the president of the PGCEA, Donald Briscoe, recently informed teachers that PGCEA is going to work with PGCPS to develop tests that will be used to evaluate all teachers, from PreK to 12 of all subjects.
So, in PGCPS in a few years, elementary students (PreK-5/6) will take atleast 9 standardized tests.

Posted by: edlharris | November 8, 2010 12:39 PM | Report abuse


I can't believe the amount of money they are spending on tests! Why not spend it on behavioral intervention or curriculum enhancement so students won't be as distracted in the classroom?

But it's all about the adults, directing public funds to private businesses and falsely claiming that it is about "reform."

All I have to say about this is - tell your daughters not to become teachers! Don't let them become the victim of politicians who are using them to promote their own careers (like Obama, Duncan and Boehner).

Posted by: educationlover54 | November 8, 2010 1:47 PM | Report abuse

Well, they haven't started to discuss what they are looking for, so testing is still a few years off.
Miss Rhee made the same proposal this past summer for DCPS, with testing in many subjects starting in Kindergarten.

I guess this is what is done in Finland and Singapore.

Posted by: edlharris | November 8, 2010 3:25 PM | Report abuse

You can discuss how absurd it is to pay a teacher based on a test score of a 9 year old, or you can look at the real reason behind merit pay.
Merit pay= destruction of public school teachers and schools= privatization= profit!
Remember, the word “reform” means “privatization” in Right-speak.
“Vouchers are a pernicious, steal-from-the-poor-and-give-to-the-rich scheme. They take money from our public school students, give it instead to private schools, and abandon many of our children in the process” – NAACP executive director Kweisi Mfume
“The privatization of schooling would produce a new, highly active and profitable industry.” – Milton Friedman
“Let’s cut right to the chase. The point of this bill is to begin the destruction of public education. In 5 years, there will be legislators standing on this floor saying that we cannot recruit enough new teachers and so we must move money into private schools. This, members, is nothing more than a ploy for cronyism by letting private contractors get their hands on the largest pot of public money in the state budget that hasn’t been privatized yet.” Rep. Scott Randolph about Florida Senate Bill 6

It's not about the kids. It's about profit.

Posted by: postscreenname | November 8, 2010 8:19 PM | Report abuse

Merit plans fail to boost scores and they do a lot of damage.
But this is what they want.
Merit pay= more profit for testing companies= downfall of public school teachers and public schools= more profit for charter and private schools and web-based learning for home-schoolers
This is not about the kids. This is about the desire to privatize education and make a profit.
It's really disgusting when you think about it, and we should all be outraged.

Posted by: postscreenname | November 8, 2010 8:23 PM | Report abuse

Merit plans fail to boost scores and they do a lot of damage.
But this is what they want.
Merit pay= more profit for testing companies= downfall of public school teachers and public schools= more profit for charter and private schools and web-based learning for home-schoolers
This is not about the kids. This is about the desire to privatize education and make a profit.
It's really disgusting when you think about it, and we should all be outraged.

Posted by: postscreenname | November 8, 2010 8:23 PM | Report abuse

Teachers, I can tell you how to get merit pay immediately, starting today. Do you know all that money you spend each week at Borders, Teachers Supplies and the grocery store? If you are anything like my friends and me, you are spending approximately $4000 a year on books, materials and supplies for all your projects. Well, stop immediately and pocket the money. Voila, you have your merit pay.

Posted by: Linda/RetiredTeacher | November 9, 2010 7:23 PM | Report abuse

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