As an addendum to the post below, I did want to say that I don’t like a lot of the discourse around the idea of “merit pay” in education, including some of what’s in Green’s piece. People often talk about this as if the idea is that we need to somehow bribe teachers into trying harder to do a good job by giving them an extra financial incentive. Unless you’ve spent your whole life inside an Introduction to Microeconomic textbook, I don’t think that makes much sense. The real issue is that people change jobs all the time, and whether or not they do so has something to do with how much their existing job pays them. If you differentiate pay based on effectiveness, then you make it less likely that your most effective staff will leave. That, I think, is common sense.
What’s more, I think this presumption already underlies our teacher compensation policies. Standard practice in public schools is to give higher pay to teachers with more experience and to give higher pay to teachers with more educational credentials. This is either effort at “merit pay,” with the idea being that experience and educational credentials signal merit, or else it’s just a giant waste of everyone’s time. The problem with the current system is that the proxies for effectiveness that we’re using are actually very bad proxies. But it’s simply not the case that the status quo consists of a flat payscale or of indifference to the idea that it’s important to retain the most valuable members of your staff.