What is the impact of pay-for-performance?

Teacher Incentive Fund (TIF) grants were awarded in 2010 by the US Department of Education to support performance-based compensation systems for teachers and principals in high-need schools.

In order to assess the impacts of pay-for-performance on educator (teachers and principals) and pupil outcomes, an experimental study design was used in ten US school districts to randomly assign elementary and middle schools to treatment and control groups. Both groups implemented the same performance-based compensation system, but in the control schools, the pay-for-performance element was replaced by a one percent bonus paid to all teachers and principals regardless of performance. A fourth and final report from this evaluation has now been published, covering all four years of the programme (between 2011 and 2015).

Among the key findings are that pay-for-performance had small, positive impacts on pupil achievement by the second year of implementation. From that year onward, reading and maths achievement was higher by 1 to 2 percentile points in schools that offered performance bonuses than in schools that did not. However, it was not entirely clear how this improvement was achieved. The impacts of pay-for-performance on classroom observation ratings did not appear to explain the impacts on pupil achievement, and in treatment schools as many as 40% of teachers were unaware that they could earn a performance bonus.

Source: Evaluation of the Teacher Incentive Fund: Final report on implementation and impacts of pay-for-performance across four years (NCEE 2017-4004),(December 2017), National Center for Education Evaluation and Regional Assistance, Institute of Education Sciences, US Department of Education.

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