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Teacher Performance Pay Boosts Student Scores (and 5 Other Study Takeaways)

The final results of a federal study on performance pay are in—and it looks like giving teachers bonuses led to slightly better math and reading results from students.

The study, conducted by Mathematica Policy Research on behalf of the U.S. Department of Education, looked at a federal program supporting performance-based pay systems for teachers and principals in low-income schools. 

The Teacher Incentive Fund was established by Congress in 2006 and has given out more than $2 billion in grants. Of the more than 130 districts that received TIF grants in 2010, 10 agreed to participate in a randomized study. In those "evaluation districts," half of the schools offered performance bonuses for teachers (acting as the treatment group) and half did not (the control group). The idea was to isolate the impact of performance pay on teacher and student outcomes.

The new report looks at implementation of TIF grants between 2011 and 2015. It is the fourth and final report in the series. 

Here are some of the big takeaways:

1) In schools that offered pay-for-performance bonuses, students' standardized test scores were 1 percentile point to 2 percentile points higher in reading and math than they were in schools that didn't give out bonuses. That means students got the equivalent of about four weeks of additional learning, the report notes. 

IES TIF student achievement.JPG

2) The bonuses weren't hard to earn. That's despite TIF guidance saying they should be challenging. Most teachers—70 percent—received them, and the average bonus was about $2,000.

3) Bonuses varied widely. Across all years, the maximum bonus was about four times the average bonus.

IES TIF performance pay chart 2017.JPG

4) About 40 percent of teachers didn't understand they were eligible for performance bonuses—even when the program was in its fourth year. Principals were a bit more likely to understand this, but 20 percent of them did not know either. 

5) Teachers well underestimated the maximum amount they could earn with a performance bonus. The largest amount they thought they could earn was two-fifths the actual amount available. 

IEF TIF grant reported pay teachers.JPG

6) While it took some time to get there, teachers in schools that gave out bonuses were ultimately more satisfied than teachers in schools without bonuses. In the first two years, they were less satisfied, but that changed by year three of implementation.

It's interesting that this final study showing positive impacts is being released now, when national chatter on performance pay seems to have died down significantly. Performance-pay measures, including the ones in the study, generally hinge on student test scores. The new federal education law, the Every Student Succeeds Act, which passed two years ago, gave states more flexibility in how they evaluate teachers, and more states are moving away from using test scores to do so

Images: Evaluation of the Teacher Incentive Fund: Final Report on Implementation and Impacts of Pay-for-Performance Across Four Years, Institute of Education Science, U.S. Department of Education, 2017

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