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Zombie Postmortem: Why Merit Pay Died in NYC, and Why It'll Rise Again (and Again, and Again...)

Last week, NYC announced the end of its merit pay program after 3 years and $56 million. It's good timing—the Atlanta cheating scandal has cast a pall over any attempt to tie compensation to test scores. The Times reports:

The decision was made in light of a study that found the bonuses had no positive effect on either student performance or teachers' attitudes toward their jobs.
...
Weighing surveys, interviews and statistics, the study found that the bonus program had no effect on students' test scores, on grades on the city's controversial A to F school report cards, or on the way teachers did their jobs.

I must express some surprise that the merit pay program didn't affect the way teachers did their jobs; teaching to the test and outright cheating are fairly well-documented responses to unreasonable emphasis on test scores. But kudos to NYC teachers for giving their best regardless of external incentives.

Oddly, the researchers from RAND, who conducted the study, thought perhaps it was the size of the bonuses that was the problem:

The researchers hypothesized that one reason for the failure of the program might have been that all city schools are already under heavy pressure to raise student test scores, or else face sanctions, including closing. In that environment, a small bonus—which could total $1,500 per teacher after taxes—might not have been significant. NYT

But wait: Even in an environment of less-intense accountability pressure, and even with much larger bonuses, the Tennessee POINT study found that merit pay does not improve student test scores. While it's worth attempting to replicate this experiment, and worth trying to find out precisely why monetary incentives don't help teachers raise test scores, I can't see any reason to be terribly surprised at the results of NYC's merit pay program.

But that doesn't mean this beast will stay down. Merit pay is the zombie of education policy—it just won't seem to die. Why is this?

First, merit pay is a logical-sounding alternative to seniority-based compensation. While teachers generally get better over time, and people generally expect to earn more as they progress in their careers, the argument for paying for years of service isn't as strong as it once was.

Because of changes in the private sector, which is far less unionized than it was decades ago, seniority-based compensation has become something of a lightning rod for critics, who say there's no justification for paying people more simply because they've been on the job longer.

Let me be clear here: Even if this isn't a factor to people who actually work in education, the strength of this sentiment in the private sector will have an impact on education. Yes, we're in the era when things are done to educators rather than with us.

Second, merit pay won't die because it still functions to allocate rewards to those who get the best "results." (I put "results" in quotes because I recognize that test scores don't fully capture the kind of results we ultimately want, which are more complex and harder to measure).

As the evidence mounts that merit pay doesn't "work"—that is, doesn't lead to higher test scores—you can expect future merit pay proposals to be justified by the rationale that merit pay is better than seniority-based pay on the grounds of simple fairness. Even if it doesn't lead to higher scores, it will be argued, it makes sense to pay more to those teachers who get better results, even if they have less experience.

Third, as Erik Hanushek has pointed out, results-based compensation has the potential to attract people to the profession who are currently drawn into other fields. The merit-pay zombie will rise again even though it has no impact on the behavior of people currently in the profession, because the potential to attract a new kind of educator will remain compelling to policymakers and funders.

As the Times notes, US spending on merit pay has quadrupled in the past five years, so the zombie is unlikely to be finally slain any time soon. However, given the mounting evidence that merit pay doesn't do what people hoped it would do, you can expect to hear new rationales for the next round of merit pay proposals.

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