Paying teachers varying amounts on the basis of how well their students perform is an idea that has been winning increasing support, both in the United States and abroad, and many school systems have adopted some version of it. Proponents claim that linking teacher pay to student performance is a powerful way to encourage talented and highly motivated people to enter the teaching profession and then to motivate them further inside the classroom. Critics, on the other hand, contend that an extrinsic incentive like bonus pay may have unfortunate consequences, including rivalry instead of cooperation among teachers and excessive focus on the one or two subjects used to measure academic progress.
In this paper, a researcher from the Manhattan Institute for Policy Research and another from the National Center on Performance Incentives at Vanderbilt University present evidence on the short-run impact of a group-level incentive pay program operating in the New York City Public School System. The School-Wide Performance Bonus Program (SPBP) is a pay-for-performance program that was implemented in approximately 200 K–12 public schools midway into the 2007–08 school year. Participating schools can earn bonus awards of up to $3,000 per full-time union member working at the school if the school meets performance targets defined by the city’s accountability program.
This study examines the impact of the SPBP on student outcomes and the school learning environment. More specifically, the study is designed to address three research questions.
- Did students enrolled in schools eligible for the SPBP perform better on the high-stakes mathematics assessment than students enrolled in schools that were not eligible?
- Did participating schools with disparate characteristics perform differently from one another? And did subgroups of students in these schools perform differently from one another?
- Did the SPBP have an impact on students’, parents’, and teachers’ perceptions of the school learning environment or on the quality of a school’s instructional program?
Although a well-executed random-assignment study is the gold standard for the making of causal inferences, readers should be aware that the analyses reported in this paper can address only the short-run effects of the SPBP because the period between the inception of schools’ participation in the SPBP and the administration of New York State’s high-stakes math exam was less than three months. The purpose of this study is to establish a baseline for subsequent analyses of student outcomes, teacher behavior, and school environment.
The authors did not discern any impact on math test scores of a school’s participation in the SPBP. The performance of students enrolled in schools participating in the SPBP did not differ statistically from the performance of students enrolled in schools assigned to the control group. The same holds true after adjusting estimates of student performance to account for whether an eligible school voted in favor of participating in the program, and thus actually enrolled in it.
The authors also investigated whether an effect of participation might be observable in particular subgroups of students or schools, if not among students or schools overall. But we could not find evidence that two possible factors—students’ race/ethnicity and their level of proficiency at the beginning of the academic year—affected the impact of the SPBP to any extent. The authors find some evidence that the math performance of students in smaller schools participating in the SPBP remained static, while the scores of students in participating schools with larger enrollments decreased. However, the relationship between school size and the impact of the SPBP warrants further study when data from year two of the SPBP become available.
The authors also examined the impact of the SPBP on students’, teachers’, and parents’ perceptions of the school learning environment, as well as an external evaluator’s assessment of a school’s instructional program. Once again, no significant differences between the outcomes of schools participating in the SPBP and those of schools that were assigned to the control group could be found.
Overall, the authors found that the SPBP had little to no impact on student proficiency or school environment in its first year. However, the authors emphasize that the short-run results reported in this study provide only very limited evidence of the program’s true effectiveness. An evaluation of the program’s impact after two years should provide more meaningful information about the impact of the SPBP. The authors intend to perform such a study and release its results in the near future.