Merit Pay, History Repeated

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The Human Resource Manager and Pay for Performance: Knowing First

Cindy Pilch-EDAD 5600

University of Wyoming

This paper will examine the history of pay for performance in education, the research on incentives and the pros and cons of using incentives. It will also explain how the accountability movement in education has resulted in increased pressure on HR personnel to incentivize teachers.

Over the last two centuries research shows varying degrees of initiation of merit pay. The 21st century has the pendulum swaying back toward the idea of finding a way to incent teachers for student achievement. Gratz ( 2005) discusses merit pay and performance pay being used synonymously and over a long period of time. The range of his study goes back to 1710 in England where children’s test scores in reading, writing and arithmetic determined a teacher’s salary. This practice continued in various forms through 1890, where after 30 years, the practice was determined to be unsound. By 1905 teachers were given autonomy in their teaching and were described as “assisting” students in their work. Merit pay in schools in 1928 had fallen to 18% and by the 1950’s it fell even further to 4%. This decline was due to increased student populations. The single salary schedule came to fruition in 1921 because the National Education Association (NEA) stipulated the measures used to evaluate merit pay were unreliable.

According to Gratz (2005) a small resurgence for merit pay began in the 1950’s because of Sputnik and a true commencement occurred during Nixon’s Presidency. In the 1960’s an experiment at Texarkana, AR in the use of merit pay was initiated due to the concern over the neglect of educational achievement in the urban poor. This resurgence was followed in the 1980’s by an endorsement by President Reagan of A Nation at Risk recommendation to promote competitive salaries that were market sensitive and based on teacher performance. Today, Obama’s fiscal 2010 budget proposal seeks additional funds for Teacher Incentive programs. It allows for grants by school districts to develop programs focused on additional pay for performance (Klein, 2009). Rebore (2007) states the use of teacher incentive pay based on performance-also known as merit pay, differential pay or financial incentives has continued to be a debate in education . Thus, as a Human Resource (HR) Manager recognizing the history of incentive pay, looking at research and synthesizing past attempts at pay for performance will help determine what has positive affects and what has not been deemed effective.

Work done by Kinnucan, Zheng, & Brehmer (2006) concludes teacher experience has significant positive correlations for student achievement. Summarizing this work through a supply demand framework depicted several outcomes:

• teacher-pupil ratio; 112 studies were cited and only 9 positive correlations, 14 negative with 89 insignificant

• teacher education. There was very little significance found for teacher education.

• teacher salaries reflected 9 positive correlations, 1 negative with 50 insignificant

• experience in teaching reflected 33 positive correlations, 5 negative with 69 insignificant

With these correlations in mind using a meta-analysis approach and the knowledge gained by understanding the importance of per pupil expenditures it was determined that increasing experienced teacher’s salaries increased student achievement.

Another overview supporting incenting teachers’ for student performance comes from Podgursky and Springer (2007). Their research was based upon a compilation of research from a few studies done from the years 1999 to 2006. They used a qualitative study on causal effects of teacher incentive programs on student achievement. It was concluded “this literature is extremely diverse in terms of incentive design, population, type of...
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