Back in August, I told you about some early results from a study of a performance-pay program that was being tested in the Lone Star State.

Piloted between the 2005-06 and the 2008-09 school years, the now-defunct Governor's Educator Excellence Grants, or GEEG, program distributed more than $10 million a year in federal grants to 99 Texas schools that managed to turn in high scores on state tests despite enrolling large numbers of students from low-income families. The program differed from some other merit-pay schemes, though, because it required schools to involve teachers in designing the performance-incentive plans for their own schools.

In the earlier study, which was conducted by researchers from the National Center on Performance Incentives, at Vanderbilt University, we learned that, when given a say, teachers tend to be remarkably egalitarian. They favor relatively modest awards and spread them widely.

In the new study, released just this month by the same group of researchers, we learn whether the pay incentives for teachers translated to any improvements in their students' test scores. The answer, in a word, is no. The third-year findings indicate that, overall, the program had a "weakly positive, negative, or negligible effect on student test-score gains."

The relative size of the bonuses did not seem to matter much, either. In this case, the range was somewhat limited because most of the plans called for individual bonuses that were less than the $3,000 minimum recommended by the state. "Perhaps because the incentive structures were so weak," write authors Lori L. Taylor and Matthew G. Springer, "we find no evidence that variations in plan design led to variations in student performance gains."

The experiment wasn't a complete bust, though. The study did turn up evidence that the incentives had an impact on teacher turnover. Teachers who received no bonuses were more likely to leave their schools, while teachers who got an award were more likely to stay. The report concludes:

"If we assume that award recipients were more effective in the classroom than non-recipients—which might be a relatively strong assumption—then the evidence suggests that even weak incentives achieved the objectives of employers."

The less-than-stellar results don't mean that merit-pay programs will disappear from Texas schools anytime soon. According to the Associated Press, the state legislature, at Gov. Rick Perry's urging, has rolled several of the state's performance-incentive programs into one. The newly consolidated District Awards for Teacher Excellence, or DATE, is being funded to the tune of $200 million a year.

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When teachers are given the opportunity to design their own performance-pay programs, they tend to choose relatively modest bonuses and spread them around more widely.

That's what researchers from Nashville's Vanderbilt University are discovering as they evaluate a performance-pay program that was piloted in Texas between the 2005-06 and the 2008-09 school years. Over those years, the Governor's Educator Excellence Grants program distributed more than $10 million a year in federal grants to 99 schools that managed to turn in high scores on state tests despite enrolling large numbers of students from low-income families.

What made the program different from some other merit-pay schemes, though, was that it required schools to involve teachers in designing the performance-incentive plans for their own schools.

Most of the plans they developed called for individual staff bonuses that were, on average, less than the $3,000 minimum that state education officials recommended—and less than most such bonuses in the private sector. (Think Wall Street.) In fact, 80 percent of the teachers who received a bonus under the program got less than $3,000.

The teacher-designed plans also turned out to be highly egalitarian: 78 percent of the teachers in the bonus-eligible schools got an award. That percentage even included some teachers who had not worked at the same school the year before.

Even a modest $3,000 bonus was enough of an incentive to dramatically reduce teacher turnover at the schools involved, the researchers found. Still, there's no clear evidence on whether the program is having an impact on student achievement, according to the report, and that, of course, is the bottom line.

But stay tuned. The final report on the program has yet to be issued, and sources tell me that it's just weeks away. In the meantime, you can read the newly released second-year report at the Web site for Vanderbilt's National Center on Performance Incentives.

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If you thought merit pay was controversial, here's an idea that will really rock your socks: How about a school finance system that is entirely performance-based?

That's what authors Eric A. Hanushek and Alfred A. Lindseth propose in their new book, Schoolhouses, Courthouses, and Statehouses: Solving the Funding-Achievement Puzzle in America's Public Schools.

Hanushek, a senior fellow at Stanford University's Hoover Institution, is best known for having sparked a national debate over whether money matters in education. (He suggested more money didn't boost student achievement all that much.) A senior partner in the law firm of Sutherland, Asbill & Brennan, Lindseth speaks from experience. He represented states such as New York, Florida, and North Dakota in important school finance cases.

In their new book, Hanushek and Lindseth trace the history of school finance as far back as the 1950s and make the case that all of the legislative and court-imposed remedies tried so far haven't led to any real improvements in schooling. What they propose instead is creating an entire school-funding system linked to increases in student achievement.

Here are some facets of their plan:

• Offering bonuses or merit pay to principals and administrators for boosting student test scores;


• Providing group rewards for teachers in schools that improve student achievement and financial incentives for good teachers to work in hard-to-staff schools;


• Basing decisions on hiring and firing teachers on their effectiveness in the classroom;


• Continuous evaluation of new programs for the purpose of continuing to fund those that work and zeroing out funds for those proven to be ineffective;


• A modified weighted-student-funding system that would provide districts with more money for students who cost more to educate, but also make adjustments for differences in local contexts; and,


• Using block grants or vouchers to pay for special education students.

You can hear the authors outline their ideas for yourself on Tuesday at a forum sponsored by the American Enterprise Institute in Washington. Randi Weingarten, the president of the American Federation of Teachers, will offer a response. Look for information about the book on the Princeton University Press Web site.

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