Performance pay bonus idea is turning heads

2nd August 2013 at 01:00
Initiative forces teachers to hand back money if they miss targets

A controversial new performance-related pay system could lead to teachers receiving bonuses in advance - but being forced to hand them back if their students fail to hit exam targets.

Research co-authored by an economist at Harvard University in the US found that the threat of having to return a portion of their salary led to a marked improvement in the attainment of teachers' students, compared with simply giving teachers a performance-based pay rise at the end of the school year.

After a small-scale trial looking at the impact of so-called "loss aversion" on teachers in Illinois last year, the findings have now been rubber-stamped by the US Department of Education, and several US school districts have expressed an interest in the system.

The research has also attracted attention in the UK, where the Education Endowment Foundation - a charity offering grants for educational projects that is part-funded by the government - has been following it closely.

Chief executive Kevan Collins told TES that he is "very interested" in trialling the approach in UK schools, should a partner organisation come forward.

The system has come in for strong criticism from classroom unions, which have accused the academics of treating teachers "like salespeople".

But Roland Fryer, professor of economics at Harvard and one of the report's co-authors, insisted that the approach "works" for schools and called for "leaders with courage" to carry out further pilots across the world.

"We need to see school districts trying this and assessing it," he said. "It's well worth trying; it's one of the few things that work.

"With teachers, people want a solution (to improving performance) that makes them feel warm and fuzzy, but if you find something that works, you've got to try it. No one likes pushback but we need leaders with courage who are prepared to try it."

The research, Enhancing the Efficacy of Teacher Incentives Through Loss Aversion, focused on 150 teachers in the city of Chicago Heights. Half the teachers involved were eligible for a bonus of up to $8,000, payable at the end of the school year depending on their performance. The other half received $4,000 in advance; they would have to return a portion of it if their students failed to meet exam targets, but could receive another $4,000 if their students performed exceptionally.

Students of the teachers in the second group reached significantly higher attainment levels at the end of the pilot.

A new system of performance-related pay for teachers will be implemented in schools in England in September, which will end automatic pay rises linked to length of service. Guidance published by the Department for Education has stressed that it is "up to each school to decide for itself how best to implement the changes", paving the way for a diverse range of schemes including those based on "loss aversion".

In a UK survey on teachers' pay published last week, 43 per cent of respondents said that performance in annual appraisals should be the most important factor in setting their pay. This was followed by student exam performance (29 per cent), professional qualifications held (11 per cent), length of service (8 per cent) and parity with other teachers (7 per cent).

Russell Hobby, general secretary of the NAHT headteachers' union, said the loss aversion approach is a "bridge too far".

"The research is intriguing and challenging, because it cuts across received wisdom on what motivates teachers," he said. "It is probably a bridge too far in today's education system - we have enough work to do connecting career progression to performance. Adding pure merit pay to the mix may be too much."

The approach was also criticised by Martin Freedman, head of pay and conditions at the Association of Teachers and Lecturers. "It would be better for teachers if they were treated like professionals rather than salespeople," he said. "Would you really say to a surgeon that you would take away some of their pay if a patient died? Is this really how you should treat professional workers?"

But Gabriel Sahlgren, research director at thinktank the Centre for Market Reform of Education, gave the system his backing. "People are more likely to engage if they have something to lose," he said. "The research seems to suggest that loss aversion can be useful if you design the programme well. If you're going to bring in performance-related pay, why not make use of loss aversion?"

Photo credit: Alamy


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