One of the signature issues of businesspeople and conservative Republicans for the past 30 years has been merit pay. They believe in competition, and they believe that financial rewards can be used to incentivize better performance, so it seems natural for them to conclude that merit pay or performance pay would incentivize teachers to produce better results.
Note that they assume that most people—in this case, teachers—are lazy and need a promise of dollars to be incentivized to get higher scores for their students. It never seems to occur to them that many people are doing their best (think people who play sports, always striving to do their best without any expectation of payment) and continue to do so because of intrinsic rewards or because of an innate desire to serve others. Teachers should certainly be well compensated, but not many enter the classroom with money as their primary motivation.
Although teachers need and want higher pay, they are strongly opposed to individual merit pay. They know that it destroys the collaboration and teamwork that are essential to the culture of the school. They know this even though few of them are familiar with the work of W. Edwards Deming, the business guru, who warned American business against ratings and merit pay. (See Andrea Gabor's The Man Who Discovered Quality, Chapter 9.) Deming said it nourishes rivalry and short-term planning, while undermining morale and long-term planning.
Few people realize that merit pay schemes have been tried again and again since the 1920s. Belief in them waxes and wanes, but the results have never been robust.
Now we have the findings of the most thorough trial of teacher merit pay, conducted by first-rate economists at the National Center for Performance Incentives. Many people expected that this trial would show positive results because the bonus for getting higher scores was so large: Teachers in the treatment group could get up to $15,000 for higher scores.
After a three-year trial, the researchers concluded that the teachers in the treatment group did not get better results than those in the control group, who were not in line to get a bonus. There was a gain for 5th graders in the treatment group, but it washed out in 6th grade.
Bottom line: Merit pay made no difference. Teachers were working as hard as they knew how, whether for a bonus or not.
But to what effect? The very next day after the release of the Nashville study, the U.S. Department of Education handed out many millions of dollars for merit-pay programs across the country and announced its intention to spend $1.2 billion on merit pay.
Ideology trumps evidence. The enduring puzzle is why the Obama administration clings so fiercely to the GOP philosophy of incentives and sanctions as the levers for change, despite lack of evidence for their efficacy.