Teacher Merit Pay: Theory and Practice
Friday, April 28, 2006
U.S. Freedom Foundation www.FreedomFoundation.us  
David W. Kirkpatrick Senior Education Fellow        

There's an ongoing debate over merit pay for better teachers.  Attractive as a theory, the idea has been rare in practice. A South Dakota Secretary of Education, Ray Christiansen, referring to merit pay, once said "I don't know the reason. I'm just telling you it doesn't work."          

If it doesn't work, there must be reasons.  Which is not to say it absolutely cannot work under any conditions, anywhere, anytime. But it won't be easy.          

Surprisingly, free-market economist Milton Friedman is not a supporter of merit pay for public school teachers.  He suggests that it only works in a competitive setting, not in a socialist enterprise such as the public school system. (As used here, socialist is a descriptive, not pejorative, term.  Socialism, by definition, is when the government owns and operates an institution or system.)          

Some years ago, teachers in a California elementary school who received $591 bonuses from the state for improved student scores donated the money to charity. They said the bonus was "merely a trap for teachers, designed to keep them quiet in the face of a scheme that only masquerades as school improvement."          

At least one review of  studies as to whether administrator judgments of teachers are valid concluded that they are not. If administrators' judgments are problematic, so, too, will be the validity of merit pay.  This, with reason, is a major concern to teachers. To the extent it is true, it is a valid argument against merit pay.  Who is to do the evaluating?          

Nor is merit pay that common in the economy. It's ironic that many state legislators who argue for merit pay for teachers are themselves paid according to fixed salaries.  Both the newest and most senior members get the same base pay.  Differences only come about for different duties, such as being Speaker of  the House, for which the salary is also set. Virtually all public officials and employees are similarly paid according to their position, not their personal merit. So, too, are most private employees.          

Merit pay is common in a few fields, primarily where choice and competition exist. No one is required to go to any movie, game, doctor or lawyer. Those in these fields, therefore, may be paid very little, as is true for the average actor, or millions of dollars for the elite few.          

Judgment of merit in these fields is a private matter derived from anonymous individual choices. When you choose to see a movie, a particular doctor, or watch a sports event,  you do so without any public announcement or judgment of what you are doing, or why.          

But a merit pay plan for public employees requires a bureaucratic performance evaluation -- at least some of which unavoidably becomes public knowledge.  Thus, unlike the doctor who may lose patients, and income, without knowing why, teachers face possible public embarrassment. Not surprisingly, they object.          

And this doesn't even consider the complexities of deciding teaching merit in the first place -- and not just because of the validity of administrative judgements (even if administrators don't play favorites).          

There is the problem of deciding how to measure teacher performance. Student achievement tests won't do it because the best students will do well even if their teachers provide little benefit. Plus, effective teaching is more than student achievement, as necessary as that is. Your memories of your best teachers surely go far beyond their knowledge or presentation of their subject.          

The answer, as is found where a merit system exists, and consistent with Milton Friedman's analysis, is to move from a public employee system to parental/student choice. Teachers who attract the most students and implement efficient and effective teaching with fewer administrators and superfluous staff and structure would be able to pay themselves more. That's already happening in some charter schools.          

Teachers are the major obstacle to their own professionalism. When they oppose relating on a mutually acceptable basis with those they serve and insist that students and money be arbitrarily assigned to them without regard to individual wishes or objective results they are largely responsible for the consequences.          

If they don't show confidence in their own competence, how can they expect to public to do so?  
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"Although teachers in the Public Agenda survey were generally cool to the idea of merit pay...seven out of 10 were receptive to the idea of 'combat pay' for colleagues who agree to work in tough neighborhoods with low-performing schools...By a 63:22 ratio, they see merit pay not as a motivator but as something that would foster 'unhealthy competition and jealousy.'" George A. Clowes, "Teachers Like Tenure But Admit Its Flaws," pp 4-5, School Reform News, July 2003