Why Merit Pay Doesn’t Work

by Betsy Ording and Kristy Placido

At first glance, merit pay for teachers and “performance-based layoffs” sound good. Usually the general public and lawmakers are drawn to these ideas. Why not reward employees for a job well done, and when layoffs are necessary, why risk laying off “the best” teachers? But with any amount of close scrutiny, which the general public may not have time for (one would assume our full-time legislature would have time) these ideas are inherently flawed and impossible to implement fairly.

First, there is the research: overwhelming scientific evidence shows that monetary rewards have a negative impact on motivation. Study after study by behavioral economists and psychologists and have shown this to be true. In 1999 Edward Deci and his colleagues published in the scientific journal Psychological Bulletin a meta-analysis of 128 separate studies that showed that financial rewards hurt intrinsic motivation. The best teachers have internal motivation that pushes them to do well.

There have been many instances where merit pay has been tried throughout the last century. School districts that have implemented merit pay, such as New York City, Nashville, and Chicago have seen no gains in student test scores. A study released by Vanderbilt University and the RAND Corporation looking at a “pay-for-performance” program put into place in the Nashville Public Schools from 2007 to 2009 showed no gains in student performance.

Even if it were not for these flaws, legislators, who often know little about teaching, have not thought of all of the variables that will interfere with successful implementation of merit pay and performance-based lay-offs. What will the measurement be? Will this cause even more reliance on testing? Will more teachers teach to the test? What about elective teachers and classes where there simply is no standardized test? (Or will we simply continue to eliminate the arts and other electives from the curriculum?) Who will get to teach the honors classes, in which students will naturally score the highest on state tests? Who would be foolish enough to seek out struggling learners or high-poverty districts?

Perhaps most concerning of all, merit pay and performance-based layoffs will inadvertently create a competitive culture among teachers, quietly pitting them against one another. Why would a teacher want to share his phenomenal “highly effective” lessons with his colleague if he is now competing with her for a job? Under new Michigan legislation that creates performance-based layoffs, this is an obvious outcome. Most teachers are inherently generous and want all students to succeed, and most teachers naturally share ideas and work together. Teachers are not salespeople, competing with colleagues for who can sell the most of a commodity. Collaboration, not competition, leads to better teaching and better schools.

Merit pay for teachers is misguided, and it is misguided to blame the “bad teacher myth” for the woes of American society. Here in the U.S., schools with the highest performing students are schools where the students’ basic needs are met (with little to no poverty). They are schools where parents have the tools they need to help their children succeed. They are schools in which teachers are encouraged to collaborate and share plans and lessons that work, rather than encouraging them to compete with the teacher in the room next door.

How do we solve the “crisis in public education?” Look to Finland, the nation with the highest student achievement in the world. In Finland, all new mothers are provided with a care package of clothing, bedding, books, toys, diapers and condoms. These kits have been credited with dramatically lowering infant mortality rates. Both parents are eligible for extensive parental leave. All children in Finland have access to government-funded high-quality preschool and kindergarten. Finnish teachers are 100% unionized, well-paid and highly trained. If we wish to have world-class schools, we must be willing to invest as a nation. We cannot ignore childhood poverty and malnutrition and expect students to come to school ready to learn. We cannot continue to batter and bruise our public teachers and expect the best and brightest to be attracted to the field. Merit pay is not the solution to these problems. It is simply one more bad idea that will drive more teachers away from a noble calling.