Performance pay is generally supported by teachers in schools where it is implemented and holds promise for retaining teachers in those schools, two new NCPI studies about Texas’ teacher performance pay program have found. However, the impact of performance pay on student achievement is still unknown. The research was conducted by a team of researchers from NCPI, the RAND Corporation, Texas A&M University, and University of Missouri under a grant from the Texas Education Agency.

“We found strong evidence that as the size of a teacher’s bonus award increased, their chance of leaving that school at the end of the school year decreased dramatically,” Matthew Springer, lead author of the new reports and director of the National Center on Performance Incentives at Vanderbilt University’s Peabody College, said. “What we didn’t find was systemic evidence that the programs had an impact on student achievement gains. While certainly student achievement is of primary interest, other findings, particularly those surrounding teacher turnover, are noteworthy considerations for policymakers considering performance pay programs.”

The two new studies report on the impact of two programs that recently came to an end in Texas this fall 2009. One was the Governor’s Educator Excellence Grants Program, or GEEG, a three-year program that distributed $10 million per year in non-competitive federal grants to 99 high-performing campuses serving low-income students. The other was the Texas Educator Excellence Grant Program, or TEEG, a program that ended after three years and distributed almost $100 million annually to approximately 1,000 schools also serving low-income students.

Springer and his colleagues found that contrary to popular concerns about performance pay, participating educators were supportive of it, and their support increased the longer they participated in the program.

“Educators that participated in the TEEG program were generally supportive of the idea of pay for performance programs as a way to reform teacher compensation practices as well as the program their school implemented,” he said. “We also found that educators’ views were even more positive if they worked in schools that participated in TEEG for all of the program’s three years, as opposed to those in schools that were selected to participate in fewer years of TEEG.”

Both TEEG and GEEG enabled school employees to determine how to structure their programs under loose guidelines set by the state. In both cases, the programs designed by the schools deviated from state guidelines in the size of the bonus awards for teachers, with schools generally giving smaller awards to more teachers than suggested by the state. Awards were generally more closely linked to the subject matter the teacher taught and the number of years they spent at that particular school, rather than the traditional teacher pay determinants of education level and overall experience. Principals in participating schools reported general satisfaction with both programs, but said they would have benefited from more state guidance on how to structure the programs. The Texas Education Agency did add a technical assistance requirement for participants in the final year of TEEG and for those schools participating in an ongoing state-funded performance pay program for districts, called the District Awards for Teacher Excellence program, or D.A.T.E.

The studies offer important guidance to policymakers both in Texas and nationwide as performance pay programs continue to grow and expand. “Moving forward, in both Texas with D.A.T.E. and in other states around the U.S., it will be important for policymakers to pay close attention to the design of performance pay plans given the implications for teacher turnover,” Springer said. “These studies indicate that larger bonuses, over a sustained period of time, can have a direct and significant impact on keeping teachers at schools.”

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

Click here for the Governor’s Educator Excellence Grant (GEEG) Program: Year Three Evaluation Report

Click here for the Texas Educator Excellence Grant (TEEG) Program: Year Three Evaluation Report