More Food For Thought On Gov. Daugaard’s Merit Pay Proposal

If Gov. Dennis Daugaard has accomplished anything with his merit pay proposal, it is to generate conversation about the South Dakota school system.

I think a lot of people will commend the governor for taking an interest in improving education in the state — especially after last year’s education proposals from his office, which didn’t extend beyond significantly decreasing education funds as part of across-the-board cuts in state spending. However, many people seem to be skeptical of the merit pay proposal. In the many conversations I’ve had with people, no one has come out and said that merit pay is a good idea for the education system — say no more, say no more.

It would suggest that the governor needs to educate the public on why he believes merit pay will work.

When he visited the Press & Dakotan office last Friday, I sought to get an answer as to why Gov. Daugaard (and South Dakota Secretary of Education Melody Schopp) believes merit pay is a good option for improving student achievement. Here is the exchange:

Me: I’ve read about multiple studies that show merit pay for teachers does not affect test scores. What makes you think that this plan will affect test scores? I assume by what you’ve said that’s what you want to see, is improved test scores.
Gov. Daugaard: I do. I think student achievement measured by test scores has to be moving up.
I don’t suggest that my plan is perfect or that I know with certainty that it will work. I do know that what we’ve been doing isn’t working. We’ve got to try something, and this is my best judgment about a methodology that will hopefully work. I’m open to other ideas so long as they are targeted to something that I believe truly will improve student achievement and isn’t simply more money for the same system.

Secretary Schopp: Many of the systems were put into place many, many years ago. They were different types of systems. We didn’t have the standardized, strong evaluation system. To make any determinations about merit pay systems that are currently going on across the nation — they are so brand new, so to have any empirical data to be able to say that … (here she changes her line of thought) … That’s why, with the governor’s proposal, it is something that South Dakota is doing that I’m hoping other states can go back and say, ‘Look what they tried and look at what South Dakota did,’ that they could base their system on.
Many things were tried in different types of formats that were not systemic with the strong training the governor is proposing that really sets the basis and criteria that I believe other state have never even attempted to do.

The question I asked is bound to come up again, and I don’t think I am stepping outside the bounds of being a reporter by saying Gov. Daugaard and Secretary Schopp should probably tighten up their response to it. As it stands, the governor seems to be asking his constituents to simply have faith in his leadership — leadership he doesn’t even seem to be so sure of in this case.

Based on what’s been found so far, skepticism is a legitimate response. A lot of research has been done on merit pay in education systems. Very little of it has found favorable results.

See here, here and here for recent examples.

One could argue that the details of the South Dakota system will be different under the governor’s proposal than what was studied above, but as my recent post about human motivation demonstrated, it’s still debatable whether changing the details has any effect on the success of the concept of merit pay in teaching as a whole.

By the way, another pitfall that must be overcome is misusing test scores in the evaluation system.

One of the few favorable studies I’ve found of merit pay was done on an international scale by Ludger Woessmann.

He states:

A little-used survey conducted by the OECD in 2005 makes it possible to identify the developed countries participating in PISA that appear to have some kind of performance pay plan. Linking that information to a country’s test performance, one finds that students in countries with performance pay perform at higher levels in math, science, and reading. Specifically, students in countries that permit teacher salaries to be adjusted for outstanding performance score approximately one-quarter of a standard deviation higher on the international math and reading tests, and about 15 percent higher on the science test, than students in countries without performance pay.

But then he offers this disclaimer:

I draw these conclusions cautiously, as my study is based on information on students in just 27 countries, and the available information on the extent of performance pay in a country is far from perfect. Further, the analysis is based on what researchers refer to as observational rather than experimental data, making it more difficult to make confident statements regarding causality.

It is possible that what I have observed is the opposite of what it seems: countries with high student achievement may find it easier to persuade teachers to accept pay for performance, thereby making it appear that merit pay is lifting achievement. More generally, both performance pay and higher levels of achievement could be produced by some set of factors other than all of those taken into account in the analysis. For example, performance pay could be more widely used in places where, as in Asia, cultural expectations for student performance are high, making it appear that performance pay systems are effective, when in fact both performance pay plans and student achievement are the result of underlying cultural characteristics. But even if my findings are not indisputable, I did carry out a variety of checks to see if any observable factor, such as Asian-European differences, could account for the conclusion. Thus far, I have been unable to find any convincing evidence that the findings are incorrect. Given that, let us take a closer look at what can be learned about the impact of performance pay from PISA data.

In closing, I’m going to quote extensively from a post by Esther Quintero at the Albert Shanker Institute. True, the organization is named after a late president of the American Federation of Teachers, but I wouldn’t discount what is said below based on a skepticism of unions, if that is your inclination.

The current teacher salary scale has come under increasing fire, and for a reason. Systems where people are treated more or less the same suffer from two basic problems. First, there will always be a number of “free riders.” Second, and relatedly, some people may feel their contributions aren’t sufficiently recognized. So, what are good alternatives? I am not sure; but based on decades worth of economic and psychological research, measures such as merit pay are not it.

Although individual pay for performance (or merit pay) is a widespread practice among U.S. businesses, the research on its effectiveness shows it to be of limited utility (see here, here, here, and here), mostly because it’s easy for its benefits to be swamped by unintended consequences. Indeed, psychological research indicates that a focus on financial rewards may serve to (a) reduce intrinsic motivation, (b) heighten stress to the point that it impairs performance, and (c) promote a narrow focus reducing how well people do in all dimensions except the one being measured.

In 1971, a research psychologist named Edward Deci published a paper concluding that, while verbal reinforcement and positive feedback tends to strengthen intrinsic motivation, monetary rewards tend to weaken it. In 1999, Deci and his colleagues published a meta-analysis of 128 studies (see here), again concluding that, when people do things in exchange for external rewards, their intrinsic motivation tends to diminish. That is, once a certain activity is associated with a tangible reward, such as money, people will be less inclined to participate in the task when the reward is not present. Deci concluded that extrinsic rewards make it harder for people to sustain self-motivation.

Similarly, behavioral economist Dan Ariely and colleagues have shown that the introduction of extrinsic rewards cause an individual’s “decision frame” to shift from a social to a monetary orientation (see here). In a separate study, Ariely also demonstrated that financial rewards can dilute the signaling value of pro-social behavior (see here), to the extent that the presence of extrinsic incentives make it harder to tell if someone is motivated by a desire “to do good or to do well.” Research also demonstrates that just activating the idea of money in somebody’s head can, by itself, reduce their pro-social behavior in subsequent and unrelated situations. For example, researchers Vohs, Mead and Goode (2008) showed that making money salient can later make you less likely to perform pro-social tasks, such as helping a stranger pick up a box of pencils that has been “accidentally” spilled (see here). …

Education, teaching and learning have much more to do with dedication, creativity, and commitment than bonuses, incentives, and perks. Some might still say that the labor market behavior of teachers and potential teachers can still obey the laws of market economics. Absolutely. But by changing the rules (i.e., bonuses) we are changing the game (i.e., education) and the players (i.e., teachers).

There is no doubt educators need to be paid fairly – nobody is suggesting otherwise. I am also not suggesting that some creative thinking and experimentation in teacher compensation isn’t warranted. That said, do we want our teachers to be the kind of people who would freely help pick up those pencils or the kind who would only help if you pay them extra? So the real question is, do we want our educators to be motivated primarily by market norms or by social norms? We probably can’t have it both ways – this may actually be an either/or issue.

Since Gov. Daugaard’s plan also aims to retain good teachers, I also feel compelled to share an excerpt from a blog by Eleanor Fulbeck that can also be found at the Albert Shanker Institute site. She summarizes the research done on the link between retention and bonuses. The results are mixed.

Thus, the available body of evaluation research on alternative teacher compensation programs does not consistently suggest financial incentives improve teacher retention. In some cases incentives appear to be associated with small increases in retention; in other cases, incentives appear to be associated with decreased retention.

The majority of evaluations, however, either found financial incentives had no effect on teacher retention or did not include an examination of retention at all. Accordingly, there is little reason to assume the availability of financial incentives will result in improved teacher retention. If anything, the research to date suggests that other considerations, such as working conditions and leadership, are more important factors in teachers’ decisions to stay, move, or leave the profession entirely.

Is that enough food for thought for one day? I know I’m exhausted from thinking about all of this!

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