Financial incentives should be at least 5% of total compensation

iStock_000016934184XSmallFinancial incentives for teachers should be at least 5% of total compensation to be effective in improving performance, says a study of 6 schools that have been implementing performance-based compensation under the 2006 federal Teacher Incentive Fund.

But financial incentives only work if they are integrated with professional development, collaboration, and evaluation as a comprehensive approach to system-wide improvement, says the report by the Bill & Melinda Gates Foundation and the Joyce Foundation.

“Because money is attached to growth, teachers are learning quality instructional and assessment techniques that they might not have engaged in had there not been a monetary award attached.  Any teacher you want to keep wants a performance-pay program,” said one teacher interviewed as part of the study.

The federal government is in the process of setting up a national evaluation of the 33 TIF sites, and local evaluations are underway. Six sites that had promising preliminary data were selected for this study of lessons learned on implementing performance-based compensation. Among the themes identified through interviews, focus groups, data analysis, and site-based observations, were that wide stakeholder involvement is essential to the design of a program and that district and state and program and financial support are important to the success of performance-based compensation reforms.

Although only in their third or fourth years of implementation, these sites have preliminary indicators showing increased student achievement, wide stakeholder support, improvements in recruitment and retention, and positive changes in school cultures, the report says.

The schools participating in this study were: National Institute for Excellence in Teaching–TAP: The System for Teacher and Student Advancement, Consortium of Algiers Charter Schools, New Orleans, LA, Amphitheater Uni Ed School District #10, AZ–Project EXCELL!  Guilford County Schools, NC–Mission Possible, School District of Philadelphia, PA, Charter Schools (Philly TAP),  South Carolina Department of Education and Florence County School District Three, SC–TAP, University of Texas System (Texas TAP).

Performance-based Compensation: Design and Implementation at Six Teacher Incentive Fund Sites,” by. Jonathan Eckert, Bill & Melinda Gates Foundation and the Joyce Foundation, August 2010.

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