The Performance based compensation system in the education sector has been a major issue based on the complexity of the issues and factors involved. Currently, there has been pressure in the education sector that compensation should be based on performance-which encompasses substituting a teacher’s pay or awarding bonuses based on student test scores, or the class performance. However, research and experience indicate that such schemes may have diverse implications on the general education. On this note, numerous researchers have deduced reasons as to why the education sector needs such reforms. According to Springer (2009), there is exceedingly visible support, connecting both a teacher’s performance and their compensation. This result from existence of weak connections, between teacher’s experience, academic qualifications and the students’ achievements. Equally, scholars agree that teachers, in addition to their expertise are, the most essential factors related to their students learning and achievements. Nonetheless, the implication of teachers to student achievement has not always been replicated in a teacher’s salary (Lavy, 2007). Therefore, the main objective is to evaluate the whole issue of teachers being compensated based on their performance, through evaluation of benefits and shortcomings.
Demerits of Performance based Compensation
In a convincing study piloted at Vanderbilt University, the results indicated that teachers who were paid bonuses for improving students’ performance produced no more improvement than their counterparts working under the equitable pay. Equally, methods that practice test scores to evaluate teachers, including the modern day popular “value added” calculations, indicate similarly evidenced unreliability (Matthew, 2010). Performance pay may drive talented teachers out of this profession. This is based on the fact that, working conditions are more important to teachers than the money factor (Bake, 2012). For instance, teachers want to work in compassionate environments, where they have room for creativity, objectivity, and environments that inspire collaboration among them, rather than compete amongst themselves. Therefore, with performance pay pitting teachers against one another, places pressure through test results, and creates suspicions about the system’s capability, increasing the probability of teachers ditching their profession and moving on to others that offer good work environments (Bake, 2012).
In case teachers are subjected to performance pay, and since they are still the examiners there will be a conflict of interest. This will definitely mean that, the test will have to be standardized to ensure fairness on all teachers. As such, the cost of setting such exams will increase, time will also be lost, and this may in turn affect the learning. Similarly, tethering a teacher’s pay to student test performance will by far deepen the anxiety that presently surrounds test-taking (Simon, Carol, Marisa, & Tominey, 2012). Thus, the result may be for teachers to narrow the skills set and content to only those topics that such standardized tests cover.
Generally, most academic experts confer that a reduced class size is a much better way to improve performance (Matthew, 2010). Therefore, if the government and other stakeholders in the education system want to make the teaching a profession worth, it ought to pay all teachers a proper professional wage to match other professions. For example, those that are comparable based on education expertise, providing them with essential teaching tools such as smaller students per classes, resilient mentors, and adequate planning time and encourage collaboration.
Merits of Performance based Compensation
Performance based pay implementation in education arises many prospective advantages besides its many challenges. This because performance based compensation can increase Productivity and Efficiency of teachers. Theoretically, pay centered on the output has three major advantages over its input-based compensation mechanism in terms of efficiency. The first and most often renowned efficiency advantage is its incentives. Thus, paying teachers or education institutions based on the pre-agreed rubric aligns incentives directed at teachers to those directed towards students. For example, if wages are based on students’ performance, they provide teachers or the education institution with influential indicators about what is valued and relevant against those that are not. Eliminating such indicators may result to teachers teaching obsolete material or material that is no longer valued by the society and the labor market. Secondly, individual performance based pay structures to improve efficiency by helping correct misrepresentations in a teacher’s effort that might result from gaps between the teacher’s preferences and those of the students (Bake, 2012). Therefore, individual performance based pay affords some incentive for the teacher with an aim of coercing them to do what is right.
The third efficiency advantage of output based pay involves both organization and selection. For instance, supposing that the merit compensation system perfectly identifies productivity, it means that the system will attract the most productive and efficient teachers. Similarly, by basing pay on output also discourages teachers who are unable to enhance their students’ performance from continuing to practice in the profession (Pennsylvania Clearinghouse for Education Research, 2012). Finally, teachers can improve the classroom performance, and connecting compensation to performance will afford all teachers incentives to improve through professional advancement, further inducing productivity gains. Lastly, performance pay based on education institution could also improve the school productivity, prompting better governance (Podgursky & Springer, 2010). Likewise, it would bring rational teacher management goals, in addition to an improved information flow feedback among all school stakeholders.
Moreover, critics of traditional pay schemes that reward experience and formal qualifications instead of performance maintain that performance based compensation is unfair to highly motivated and efficient teachers. Thus, through a performance based pay, it would ensure that compensation systems are more equitable. Finally, performance pay may grow support for public education from political leaders and the general public who preserves that reform should reverse the public education sector’s poor ratings (Lavy, 2007).
In conclusion, the performance pay system has continuously attracted criticism and teachers feel that they should not be rated through performance. Accordingly, the system proves to be costly, thus not economical, especially in these hard times. Nonetheless, such challenges can be overcome in order for them to favor the system. For instance, a principal base assessment system which confirms that principals are better placed to identify the most value adding teachers in their school is a more appropriate approach that can help towards eliminating numerous challenges mentioned earlier. In addition, to confront the challenge of the system discouraging collaboration, the system can be formulated in such a way that it rewards teacher cooperation, particularly through group based pay. Thus, most of the concrete challenges confronting the performance pay system can be addressed through well thought out designing of the system. Further, regardless of the opposition by teachers unions to performance based structure, there are no strong indications that the objections to the system come from the teachers themselves.
Bake, B. (2012). Revisiting that Age-Old Question: Does Money Matter In Education? Retrieved February 19, 2014, from http://www.shankerinstitute.org/images/doesmoneymatter_final.pdf
Lavy, V. (2007). Using Performance-Based Pay to Improve the Quality of Teachers. Journal Issue: Excellence in the Classroom Volume 17 Number 1 .
Matthew, S. (2010, Sep 21). Teacher Pay for Performance: Experimental Evidence from the Project on Incentives in Teaching,” National Center on Performance Incentives at Vanderbilt University http://parentsacrossamerica.org/performancepay/#sthash.DG4Uqghh.dpuf.
Michael, P., & Matthew, S. (2010). TEACHER PERFORMANCE PAY: A REVIEW. Retrieved February 21, 2014, from http://web.missouri.edu/~podgurskym/papers_presentations/reports/Podgursky%20and%20Springer.pdf
Pennsylvania Clearinghouse for Education Research (PACER). (2012, April). Issue BrIef Performance Pay for Teachers. Retrieved February 21, 2014, from http://www.researchforaction.org/wp-content/uploads/2012/05/RFA_PACER_Issue_Brief_Teacher_Compensation.pdf
Simon, B., Carol, P., Marisa, R., & Tominey, E. (2012). Incentives in the public sector: Evidence from a government agency. Retrieved from http://www.econstor.eu/bitstream/10419/62541/1/720520940.pdf