Linking Teacher Compensation to Performance

The federal government, states, school districts, and individual schools should align policies, procedures, and practices, as well as funding determinations to encourage and move toward linking teacher compensation to performance, also known as merit-based pay. The strategic importance of a strong instructional core to a school district’s success in the primary and secondary education sector requires a systematic commitment to intensifying the effort and focus on merit-based bay.

Failure to act would risk that school district’s relevance and position in the primary and secondary education market, as research indicates that the outcome of raising student performance is not only positively correlated with having teachers who know their subject matter and how to teach it, but, conversely, it is negatively correlated with teachers less qualified in their subject matter. Moreover, the increased competition threat from private schools, charter schools, and other options that parents of school age children are provided, intensifies the importance for school districts to link teacher compensation to performance in order to strategically enhance their market position.

Options and Criteria for Decisions on Merit-Based Pay

A number of possible opportunities with linking teacher performance to teacher compensation have been identified. Listed are four synthesized options and a discussion of the criteria and reasoning behind the option.

Option #1: Teachers Developing and Achieving Student Learning Objectives

Decision: School districts should implement a program where teachers begin each school year by developing two student learning objectives after reviewing the prior performance data on their incoming students. Teachers will also identify tools that will serve as measurements of those student-learning objectives. Success on achieving those objectives should be tied to teacher compensation. Three assumptions and add-on recommendations are coupled with the decision: (a) the student learning objectives should be aligned with broader goals and objectives of the individual department, the school as a whole, district-wide, state standards-based measurements of student performance, etc; (b) the merit-based pay should begin as an add-on value to the current teacher compensation (i.e., extra compensation) until teachers are more familiar with the process; and (c) along with the teachers, the entire system must be engaged in the process — this includes principals, district staff and administrators, parents, communities, and local, state, and federal politicians.  

Criteria and Reasoning: This option has strength since developing student learning objectives is uniquely a teacher activity; thus, it is suitable for use in extra compensation. Moreover, this option increases teacher accessibility to student data that the district has already collected. This option also works with individual teachers and does not impose a specific teaching model. Furthermore, this option influences the entire organization to be open, accurate, and reflective about student outcomes. Finally, since teacher quality is important to student achievement, these techniques will enhance teacher quality since they enhance a teachers capacity to plan, focus, problem-solve, and seek solutions.  

Option #2: Strengthen Evaluations

Decision: School Districts should strengthen the evaluation process for probationary teachers as well as teachers who have already been tenured. Tenure should not be an automatic outcome for probationary teachers, as bad teachers should not have their contracts extended or be awarded tenure without consideration of the evaluation. Furthermore, there should be an annual or a once every two years evaluation system for tenured teachers. This evaluation for tenured teachers should be tied to a reward system. This reward system should be an add-on to the current compensation system.

Criteria and Reasoning: Unfortunately, tenure in the public primary and secondary education sector has become a formality, and currently the system does not make it easy to get rid of teachers who have been identified as not being effective. Current data indicates that 73% of tenured teachers believe that evaluations have become either a formality or well-intentioned but not particularly helpful. Thus, it does not help improve poor teachers’ performance, as it is not tied to a reward system. Strengthening the evaluation process will make it easier for principals to identify and remove teachers in their probationary period prior to them becoming tenured. Furthermore, the additional reward system for already tenured teachers could act as a motivator for the teachers to take the evaluation process more seriously.

Option #3: Compensation Tied to Other Performance Measurements

Decision: School districts should pay teachers in tough neighborhoods, teachers who have National Board for Professional Teachings Standards certification, teachers in hard-to-fill subjects, and teachers who consistently receive outstanding evaluations by their principals more then other teachers.

Criteria and Reasoning: Data from surveys of current teachers indicates that teachers believe that it is justifiable to pay colleagues differently based on working conditions and extra efforts. This is also a set of merit-pay standards that teachers are familiar with; thus, it makes it easier to justify the decisions to both teachers and the unions. This will encourage more teachers to get this type of certification and training, which will in turn make them more qualified in the profession. As previously indicated, the research suggests that more qualified teachers are positively correlated with higher scores on standards-based measurements of student performance.  

Option #3: Reduce Rules/Regulations and Allow Teachers To Leave Without Loosing Retirement Benefits

Decision: School districts should make it easier for teachers to leave and return without loosing retirement and other benefits. Furthermore, school districts should treat teachers as the professionals that they are, and reduce the many rules, policies, and regulations that the teachers have to follow.

Criteria and Reasoning: Reducing the many rules that teachers and principles have to follow will allow them to see themselves as more professional. For example, most teachers have at least a bachelor’s degree, and some have a master’s degree. It is demoralizing and does not serve to teachers feeling as professionals when they have to, like in most districts, sign-in to work using a time card. Furthermore, teachers complain that it is difficult for teachers to leave the system if they are not effective because of the benefits and retirement system that is strictly tied to longevity. Thus, it is important for school districts to make it easier for teachers to take sabbatical and receive more education or re-training without loosing benefits.

Opportunities of the Options as an Action Plan

The four options above, if implemented, serve as a coherent set of intentional actions that link teacher compensation and performance with a goal of strengthening the instructional core for the purpose of raising scores on measurements of student performance. One of the opportunities of the above as an action plan is that they are based on teacher survey data of changes that teachers are comfortable with. This is particularly important in environments where the unions are powerful. While the first option was not surveyed for favorability, the other survey data does indicate that teachers are more open to the idea of pay based on student outcomes if it comes as additional compensation or add-on value.

Since good teachers will effect a student’s performance, the above options, taken together, create environments where schools can attract, retain, and move-around teachers in a tactical approach that is tied to the overall strategy of improving performance on standards based tests. These decisions, when coupled with the larger district-wide strategy can serve as important tactics in strengthening the school district’s market position in comparison to private schools, charter schools, and other options that parents of school age children may have.

Disadvantages, Limitations, and Risks of the Options as an Action Plan

There are some disadvantages and limitations of the options as an action plan. First, a number of the options are logistically a nightmare. For one, especially with the first option, individual students are not stagnant within the classroom, school, or district. For instance, the Philadelphia School District has a district transfer in-or-out rate was over 40%. This indicates that the numbers are even higher at the school level and the classroom level. This makes it very difficult for teachers, principals, and districts to track a teacher’s effect on an individual student’s performance. Some students will leave within week of the year starting, while others may join the classroom weeks before the school year ends. Should teachers be evaluated only on the students that remain in the classroom from beginning to end? Or should they be evaluated and compensated based on the performance of all the students, even if they only had one week to implement their pedagogical approaches to that individual student? Would teachers get pro-rated merit pay for students they only had half a year? And is the assumption that the first half was equally as important as the second half?

A second limitation and disadvantage is that it is based on the assumption that student learning from one classroom is not interconnected to their learning in another classroom. How should the system account for a poor quality English teacher who will have negative implications his or her students’ ability to answer world problems on the mathematics performance examination? Cognitive development research indicates that increases in standards based performance is inter-related with both academic and non-academic factors; thus, it becomes very difficult, if not truly impossible, to associate a students’ performance measurement with a particular teacher or a particular course.  

A third disadvantage of this approach is it focuses on short-term results rather then long-term results and it does not account for factors beyond a teacher’s control. Furthermore, this will increase rules and regulations that are tied to compensation and benefits. Thus a poor teacher will set lower standards and objectives for his/her students, which may show him/her as meeting the standards and eligible for the add-on pay, while in reality actual student performance and learning may have not occurred.  

Response and Conclusion

School districts and individual schools need to weigh both the opportunities and risks involved in moving toward a merit-based pay system for teachers. While there are many risks and limitations involved for the system, one thing that still remains clear is that poor teachers are going to have negative effects on their student’s performance scores on standards based measurements of achievement. Thus, it is critical to create a system that can work within the context of each individual district, its schools, teachers, administrators, and unions in order to find ways to remove poor performing teachers, while rewarding and retaining teachers who excel in their performance and abilities to effect standards based performance score gains in their students. This is not only important for the individual students, but it is also critically important if the schools and districts want to retain the relevance and position they have in the public education market.


  1. Above one question is mentioned that Should teachers be paid based on their performance? and my answer is of course. They build our minds in short they build our base. They are very beneficial for any states future and present and also for past.

Leave a Reply