NASHVILLE, Tenn.–Performance pay programs designed by teachers, for
teachers have been found to offer small incentives to a large number of
teachers, new research indicates.

“We found that when teachers design performance pay programs they tend to be
egalitarian, offering everyone a little bit of money,” Matthew Springer,
director of the National Center on Performance Incentives at Vanderbilt
University and a co-author of the new research, said.

The study drew data from Texas public schools participating in the
Governor’s Educator Excellence Grants Program, or GEEG. GEEG was a
three-year program that distributed $10 million per year in non-competitive
federal grants to 99 high-performing campuses serving low-income students.
It was the nation’s largest state-funded performance pay program when it was
launched in 2005.

Under GEEG, participating schools were required to design their own
incentive pay plans, using broad guidelines set by the Texas Education
Agency.

“Because the guidelines required that teachers play a significant role in
the design and implementation of their school’s plan, the GEEG program
represents a unique opportunity to explore optimal incentives from the
employer and the employee’s perspectives,” Lori Taylor, assistant professor
at the Bush School of Government and Public Service at Texas A&M University,
said. “The evidence strongly suggests that teachers prefer relatively weak
incentives.”

In most participating schools, over 80 percent of teachers received some
sort of bonus.

“The GEEG incentive plans systematically offered smaller awards to a higher
proportion of teachers than was obviously intended by the state education
agency,” Taylor said. “Intriguingly, weak incentives were more common in
situations where one would think stronger incentives would be more effective
at changing behavior.”

The researchers also found that even weak incentives had a positive impact
on teacher retention. Teachers who received no award were more likely to
leave their jobs than those who received an award, while awards of $3,000
reduced turnover among the recipients to roughly half the rate observed
before the GEEG program.

“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,” Springer and Taylor said. “The GEEG program increased retention
of those teachers that schools particularly wished to retain.”

The research was conducted under a grant from the Texas Education Agency.

To read a copy of the report, please click here.