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The impact of pay-for-performance

A new report from Alison Wellington and colleagues, published by the Institute of Education Sciences, looks at the implementation and impacts in US schools that offered pay-for-performance as part of their 2010 Teacher Incentive Fund (TIF) grants. These grants, now named the Teacher and School Leader Incentive Program, support performance-based compensation systems for teachers and principals in high-need schools.

An experimental study design was used to assess the impacts of pay-for-performance on educator and student outcomes. Elementary and middle schools within the evaluation districts were randomly assigned to treatment and control groups. The treatment schools were to fully implement their performance-based compensation system. The control schools were to implement the same performance-based compensation system with one exception—the pay-for-performance bonus component was replaced with a one percent bonus paid to all educators regardless of performance.

For the 10 evaluation districts that completed three years of TIF implementation (between 2011 and 2014), key findings showed that pay-for-performance had small, significant positive impacts on students’ math and reading achievement. The report notes that after three years of TIF implementation, the average math score was 2 percentile points higher in schools that offered pay-for-performance bonuses than in schools that did not. The average reading score was 1 percentile point higher in schools that offered pay-for-performance bonuses than in schools that did not. This difference was equivalent to a gain of about four additional weeks of learning.

Source: Evaluation of the Teacher Incentive Fund: Implementation and Impacts of Pay-for-Performance After Three Years (2016), Institute of Education Sciences

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