What is Merit Pay For?

Dana Goldstein offers some skepticism about so-called “merit pay” for teachers:

Consider this TED talk on career motivation from Dan Pink, a former Al Gore speechwriter who is now a business journalist. If you can get past the MBA lingo, there’s a lot here that is really consequential for education policy. Forty years of psychological research demonstrates that when someone is faced with a complex, creative task — like teaching — money is an ineffective motivational tool, and may even delay progress. Professionals engaged in creative work are more likely to be motivated by autonomy, and by the feeling that they are part of a larger, socially important enterprise.

That seems plausible to me. But I think it mistakes the purpose of offering higher salaries to more effective teachers. I don’t think the idea is that ineffective teachers are going to suddenly will themselves into becoming great teachers in order to grab some incentive pay. The point is that if you’re employing a bunch of teachers, any of whom might depart in favor of employment elsewhere, you want to make sure that it’s your most effective teachers who are least likely to quit. And one way to do that is to make sure that it’s your most effective teachers — rather than simply your longest-serving ones — who are getting paid the most money.

Indeed, for all the controversy around differential pay schemes at some level I don’t think even the most old-school of teacher’s union leaders seriously dispute this logic. After all, it’s extremely common for collective bargaining agreements to offer enhanced salaries to teachers who have more educational credentials. The logic here, presumably, is that more educated teachers are more effective teachers and thus it makes sense to pay extra to retain them. The diplomas, in other words, are a proxy for quality. Similarly, veteran teachers get paid more than brand new teachers on the theory that a more experienced instructor is a better instructor. The principle that it makes sense to pay extra for quality isn’t seriously in dispute. The problem is that diplomas and time served turn out to be bad proxies for quality: “Recent research, however, suggests that such paper qualifications have little predictive power in identifying effective teachers.”


The reform proposal, ultimately, isn’t all that radical. Rather than paying extra for very weak correlates of effective teaching, why not just pay extra for effective teaching? To the extent that such a compensation scheme creates incentives for teachers to improve their own performance, that will be nice. But the real benefit to paying for quality is that, over time, it will encourage effective teachers to keep teaching while encouraging ineffective teachers to find jobs to which they’re better-suited, thus improving the overall quality of the instructor pool.