Teacher Incentives


The Daily Riff recently highlighted the 60 Minutes story on the TEP charter school in New York City. According to their website, “teacher quality is the most important school-based factor in the academic success of students.” Therefore their, “teachers are valued and sustained through revolutionary compensation: a $125,000 annual salary and the opportunity to earn a significant annual bonus based on school-wide performance.” However, the school performed less than the regional average on standardized tests.

In his research Roland Fryer (Fryer, 2011) states,

“Theoretically, teacher incentives could have one of the three effects. If teachers lack motivation or incentive to put effort into lesson planning, parental engagement, and so on, financial incentives for student achievement may have a positive impact by motivating teachers to increase their effort. If, however, teacher incentives have unintended consequences such as explicit cheating, teaching to the test, or focusing on specific, tested objectives at the expense of more general learning, teacher incentives can have a negative impact on student performance (Holmstrom and Milgrom, 1991; Jacob and Levitt, 2003). Similarly, some argue that teacher incentives can decrease a teacher’s intrinsic motivation or lead to harmful competition between teachers in what some believe to be a collaborative environment (Johnson, 1984; Firestone and Pennell, 1993).”

“I find no evidence that teacher incentives increase student performance, attendance, or graduation, nor do I find any evidence that the incentives change student or teacher behavior.”

It seems that an increase in pay will attract the best teachers, but will not motivate them to perform better.

From a business standpoint, two things impressed me about the TEP charter school: 1) The school had a strong culture of being the best it could possibly be. Teachers would often work 80 or 90 hour weeks, and were constantly self-analyzing and improving. 2) Vanderhoek is acting as a strong leader and not just a  supervisor. In my years as a student, I never saw an administrator try to motivate his or her staff. I only saw administrators silently sit in the back of classrooms checking off boxes on their clipboard.

Fryer, Roland G. (March, 2011). Teacher Incentives and Student Achievement. NBER Working Paper Series. Working Paper 16850. Pulled March 17th, 2011.

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