This document outlines an examination of how performance-based pay affects teacher motivation and workplace relationships. It begins with an introduction discussing the increased focus on student achievement outcomes and how performance pay is intended to motivate teachers and improve instruction. The document then provides an outline of the topics to be covered, including different types of incentives, how rewards are used internationally, rationales for performance pay, what research says about its impacts, and potential risks. It concludes that while performance pay aims to improve student outcomes, research does not clearly demonstrate these impacts and careful planning is needed to avoid unintended consequences like reduced motivation and morale.

1. Performance-based pay and
teachers:
AN EXAMINATION OF CONSEQUENCES ON
INTRINSIC MOTIVATION AND WORKER-
EMPLOYEE RELATIONSHIPS.

2. Introduction
 How performance-based pay affects teaching
profession

3. Introduction
 Extrinsic Motivators (or rewards) Influences:
 Intrinsic motivation
 Working relationships
 Superiors
 Colleagues

4. Introduction
 Poor student achievement:
 Increased awareness toward public education
 Resulted in many new education reforms

5. Introduction
 Performance-based pay is used to:
 Motivate teachers
 Raise instructional quality
 Increase student achievement
 Locating inadequate teachers

6. Outline

7. Outline
 Types of Incentives
 Use of rewards in different countries

8. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay

9. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay
 What research says about the use of performance-
based pay

10. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay
 What research says about the use of performance-
based pay
 Methods used to evaluate teachers

11. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay
 What research says about the use of performance-
based pay
 Methods used to evaluate teachers
 Factors which lead to reduced teacher morale

12. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay
 What research says about the use of performance-
based pay
 Methods used to evaluate teachers
 Factors which lead to reduced teacher morale
 Risks of using rewards in the workplace

13. Outline
 Types of Incentives
 Use of rewards in different countries
 Reasons for using performance-based pay
 What research says about the use of performance-
based pay
 Methods used to evaluate teachers
 Factors which lead to reduced teacher morale
 Risks of using rewards in the workplace
 Conclusion

14. Types of Incentives
Monetary Non-Monetary

15. Types of Incentives
Monetary Non-Monetary
Pay bonuses
Improved job stability
Pensions
Salary supplements

16. Types of Incentives
Monetary Non-Monetary
Pay bonuses Professional development
opportunities
Improved job stability
Additional teaching
Pensions resources
Salary supplements Coupons or vouchers
Social recognition (e.g.
award ceremonies, etc)

17. Comparison of Use
Developed Countries
 Monetary incentives
 Hybrids
 Monetary
&
 Non-monetary
 Majority of rewards = $

18. Comparison of Use
Developed Countries Developing Countries
 Monetary incentives  Non-monetary
 Hybrids incentives
 Monetary  More economical
&
 Non-monetary
 Majority of rewards = $

19. Rationale
Improve student academic achievement.
Improve instructional abilities and quality
Increase education standards
Increased teacher work ethic

20. Capitalism & Education
 Money is the only true form of motivation
 Corporate routines and ethos have influenced
mainstream education

21. Capitalism & Education
 Money is the only true form of motivation
 Corporate routines and ethos have influenced
mainstream education
 Competition for additional funding
 Race to the Top
 Competition will produce
 Increased levels of instruction
 New “types” of teachers who thrive in a competitive
environment
 A means to identify and remove weak performers

22. Research says…
 Performance-based pay ≠ Increased student
achievement

23. Research says…
 Performance-based pay ≠ Increased student
achievement
 Frequency of work-related incentives is increasing

24. Research says…
 Performance-based pay ≠ Increased student
achievement
 Frequency of work-related incentives is increasing
 Performance-based pay ≠ Increased work quality

25. Research says…
 “Tone” is advesarial
 Typically in developed countries

26. Research says… Benefits?
 Reduced teacher mobility between schools
 “Undesirable” schools experienced increased teacher stability

27. Research says… Benefits?
 Reduced teacher absenteeism
 When pay was linked to attendance

28. Benefits? However…
 Some teachers sought out schools with performance-
based pay
 Good teachers moved in order to qualify for higher earnings
 Struggling schools could not hold onto good teachers

29. Research says…
 Performance based-pay needs to be
 Linked to instructional quality

30. Research says…
 Performance based-pay needs to be
 Linked to instructional quality
 Transparent to teachers that evaluation methods truly assess
high quality instruction

31. Teacher Evaluation
 All tasks are not created equal
 Nor should be evaluated equally

32. Teacher Evaluation
• All tasks are not created equal
o Nor should be evaluated equally
Algorithmic Tasks Heuristic Tasks
Assembly line Creative
Predicable outcome & method of Requires problem-solving
completion

33. Teacher Evaluation
 All tasks are not created equal
 Nor should be evaluated equally
Algorithmic Tasks Heuristic Tasks
Assembly line Creative
Predicable outcome & method of Requires problem-solving
completion
• Teaching profession is arguably heuristic

34. Teacher Evaluation
 How evaluations are used:
 Administrators
 Utilized results to assess teacher’s involvement in school (outside
of regular teaching schedule)

35. Teacher Evaluation
 How evaluations are used:
 Administrators
 Utilized results to assess teacher’s involvement in school (outside
of regular teaching schedule)
 Teachers
 Want results to reflect teaching strengths
 Identify instructional areas that need improvement

36. Human Motivation Theories
 Range of human needs
 Basic  Food, water, shelter
 Complex  Interests, potential activities that lead to success

37. Human Motivation Theories
 Extrinsic rewards
 Reduce intrinsic motivation
 Potentially reduce perceived worker autonomy

38. Human Motivation & Autonomy
 Autonomy is a common thread between many
human motivation theories
 Autonomy is reduced:
 With overuse use of worker monitoring
 Increased frequency of worker evaluations

39. Human Motivation & Mainstream Ideals
 Intrinsic motivation & autonomy are given little
consideration
 Motivation ≠ Intrinsic + Extrinsic according to
economists
 Money represents the only motivator for all workers

40. Quality of Work
 Decreased motivation = decreased quality

41. Quality of Work
 Decreased motivation = decreased quality
 Worker apathy is created with perceived loss of
autonomy and reduce intrinsic motivation

42. Low Teacher Morale
 Factors leading to reduced morale:
 Low fixed wages (more common in developing countries)

43. Low Teacher Morale
 Factors leading to reduced morale:
 Low fixed wages (more common in developing countries)
 New policies

44. Low Teacher Morale
 Factors leading to reduced morale:
 Low fixed wages (more common in developing countries)
 New policies
 Reduced teacher bargaining rights

45. Risks of Using Incentives
 Opportunistic behaviour
 Teaching to test
 Reduced teamwork
 Increased teacher mobility

46. Risks of Using Incentives
 Opportunistic behaviour
 Teaching to test
 Reduced teamwork
 Increased teacher mobility
 Narrowed focus
 Focus on achieving rewards becomes teacher’s primary
concern
 Aspects of job deemed irrelevant if they did not contribute to
attaining incentive(s)

47. Risks of Using Incentives
 Opportunistic behaviour
 Teaching to test
 Reduced teamwork
 Increased teacher mobility
 Narrowed focus
 Focus on achieving rewards becomes teacher’s primary
concern
 Aspects of job deemed irrelevant if they did not contribute to
attaining incentive(s)
 Increased resentment toward authority

48. Conclusion
 Research fails to determine that performance-based
pays increases:
 Student achievement
 Instructional quality
 Planning process:
 Requires much consideration before implementation
 Should be transparent
 Should allow teacher input

49. Conclusion
 Alternative Rewards
 Greater consideration for non-monetary incentives
 Alternative rewards may also create cost-saving incentives
 Trust
 Shift in focus from competition to collaboration
 Trust (with accurate tools to measure accountability) should be
placed back into the teaching profession

50. References
Amiable, T.M. (1993). Motivational synergy: Toward new
conceptualization of intrinsic and extrinsic motivation in the
workplace. Human Resource Management Review, 3(3), 185.
doi:10.1016/1053-4822(93)90012-S
Andrews, H.A. (2011). Supporting quality teachers with recognition.
Australian Journal of Teacher Education, 36(12), 59-70.
Ballot, D. (2001). Pay for performance in public schools. Economics
of Education Review, 20, 51-61.

51. References
Barkema, H.G. (1995). Do job executives work harder when they are
monitored? Kyklos, 48, 19–42.
Buck, S., & Greene, J.P. (2011). Blocked, diluted, and co-opted:
Interest groups wage war against merit pay. Education Next, 11(2),
26-31.
Camerer, C.F. (2010). Removing financial incentives demotivates the
brain. Proceedings of the National Academy of Sciences of The
United States of America, 107(49), 20849-20850.
doi:10.1073/pnas.1016108107

52. References
Chamberlin, R., Wragg, T., Haynes, G., &Wragg, C. (2002).
Performance-related pay and the teaching profession: A review of
the literature. Research Papers in Education, 17(1), 31-49.
doi:10.1080/02671520110102534
Cohen, D.K., &Murnane, R.J. (1985). The merits of merit pay.
Retrieved from
http://eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=tr
ue&_&ERICExtSearch_SearchValue_0=ED270843&ERICExtSearc
h_SearchType_0=no&accno=ED270843
Deckop&Cirka. (2000). The risk and reward of a double-edged sword:
Effects of a merit pay program on intrinsic motivation. Nonprofit &
Voluntary Sector Quarterly, 29(3), 400-418.
doi:10.1177/0899764000293003

53. References
Dee, T.S., & Keys, B.J. (2004). Does merit pay reward good teachers?
Evidence from a randomized experiment. Journal of Policy
Analysis & Management, 23(3), 471-488. doi:10.1002/pam.20022
Frey, B.S. (1993). Does monitoring increase work effort? The rivalry
between trust and loyalty. Economic Inquiry, 31(4), 663–670.
doi:10.1111/j.1465-7295.1993.tb00897.x
Frey, B.S., &Jegen, R. (2001). Motivation crowding theory. Journal of
Economic Surveys, 15(5), 589–611. doi:10.1111/1467-6419.00150

54. References
Goodman, S., & Turner, L. (2011). Does whole-school performance pay
improve student learning? Evidence from the New York City
schools. Education Next, 11(2), 67-71.
Griffith, S.A. (2008). A proposed model for assessing quality of
education. International Review Of Education, 54(1), 99-112.
doi:10.1007/s11159-007-9072-x
Guarino, C.M., Brown, A.B., & Wyse, A.E. (2011). Can districts keep
good teachers in the schools that need them most?. Economics of
Education Review, 30(5), 962-979.

55. References
Hatry, H.P., Greiner, J.M., & Urban Inst., W.C. (1984). Issues in
teacher incentive plans. Retrieved from
http://eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=tr
ue&_&ERICExtSearch_SearchValue_0=ED244340&ERICExtSearc
h_SearchType_0=no&accno=ED244340
Howell, W., Peterson, P.E., & West, M. (2011a). The public weighs in
on school reform: Intense controversies do not alter public thinking,
but teachers differ more sharply than ever. Education Next, 11(4),
10-22.
Howell, W., West, M., & Peterson, P.E. (2011b). Meeting of the minds.
Education Next, 11(1), 20-31.

56. References
James, H.S. (2005). Why did you do that? An economic examination
of the effect of extrinsic compensation on intrinsic motivation and
performance. Journal Of Economic Psychology, 26(4), 549-566.
doi:10.1016/j.joep.2004.11.002
Kessler, I., & Purcell, J. (1991). Performance-related pay: theory and
practice. Paper presented at the 10th Colloquium for the European
Group of Organisation Studies, Vienna, July 1991. Oxford:
Templeton College: The Oxford Centre for Management Studies.
Kobakhidze, M. (2010). Teacher incentives and the future of merit-
based pay in Georgia. European Education, 42(3), 68-89.
doi:10.2753/EUE1056-4934420304

57. References
Lavy, L. (2007). Using performance-based pay to improve the quality
of teachers. Future of Children, 17(1), 87–108.
doi:10.1353/foc.2007.0007
Locke, E., Feren, D., McCaleb, V., Shaw, K., & Denny, A. (1980). The
relative effectiveness of four ways of motivating employee
performance. In Changes in Working Life, ed. KD Duncan, MM
Gruenberg, D Wallis, pp. 363–88. New York: Wiley
Markova, G., & Ford, C. (2011). Is money the panacea? Rewards for
knowledge workers. International Journal Of Productivity And
Performance Management, 60(8), 813-823.
doi:10.1108/17410401111182206

58. References
Matsumura, L., Garnier, H., Pascal, J., &Valdés, R. (2002). Measuring
instructional quality in accountability systems: Classroom
assignments and student achievement. Educational
Assessment,8(3), 207-229. doi:10.1207/S15326977EA0803_01
McCollum, S. (2001). How merit pay improves education. Educational
Leadership, 58(5), 21-24.
McKeachie, W.J. (1997). Student ratings the validity of use. American
Psychologist 52(11), 1218–1225. doi:10.1037//0003-
066X.52.11.1218

59. References
McLeod, D.B., Stake, R.E., Schappelle, B., Mellissinos, M., &Gierl. M.
(1996). Setting the standards: NCTM’s role in the reform of
mathematics education. In: Bold Ventures: U.S. Innovations in
Science And Mathematics Education. Vol 3: Cases in Mathematics
Education, ed. by Senta A. Raizen and Edward D. Britton, 13–132.
Dordrecht, The Netherlands: Kluwer.
Muralidharan, K., &Sundararaman, V. (2011). Teacher opinions on
performance pay: Evidence from India. Economics of Education
Review, 30(3), 394-403. doi:10.1016/j.econedurev.2011.02.001
Murayama, K., Matsumoto, M., Izuma, K., & Matsumoto, K. (2010).
Neural basis of the undermining effect of monetary reward on
intrinsic motivation. Proceedings of The National Academy of
Sciences of The United States of America, 107(49), 20911-20916.
doi:10.1073/pnas.1013305107

60. References
Murnane, R.J., & Cohen, D.K. (1985). Merit pay and the evaluation
problem: why most merit pay plans fail and a few survive. Harvard
Educational Review, 56(1), 1–17.
Osterloh, M., & Frey, B.S. (2000). Motivation, knowledge transfer,
and organizational forms. Organization Science, 11(5), 538-72.
Pink, D.H. (2009). Drive: The surprising truth about what motivates
us. New York, NY: Riverhead Books.

61. References
Pfau, B.N., & Kay, I.T. (2002). The five key elements of a total rewards
and accountability orientation. Benefits Quarterly, 18(3), 7-15.
Podgursky, M., & Springer, M.G. (2007). Credentials versus
performance: Review of the teacher performance pay research.
Peabody Journal of Education (0161956X), 82(4), 551-573.
doi:10.1080/01619560701602934
Pouliakas, K. (2010). Pay enough, don't pay too much or don't pay at
all? The impact of bonus intensity on job satisfaction.
Kyklos, 63(4), 597-626. doi:10.1111/j.1467-6435.2010.00490.x

62. References
Ramirez, A. (2001). How merit pay undermines education.
Educational Leadership, 58(5), 16-20.
Rynes, S.L., Gerhart, B., & Parks, L. (2005). Personnel psychology:
Performance evaluation and pay for performance. Annual Review of
Psychology, 56(1), 571-600.
doi:10.1146/annurev.psych.56.091103.070254
Scott, T. (2011). A nation at risk to win the future: The state of public
education in the U.S. Journal for Critical Education Policy Studies,
9(1), 267-316.

63. References
Smarick, A. (2011). Diplomatic mission: President Obama's path to
performance pay. Education Next, 11(1), 56-63.
Vallerand, R., &Bissonette, R. (1992). Intrinsic, extrinsic, and
amotivational styles as predictors of behavior: A prospective study.
Journal of Personality 60(3), 599-620. doi:10.1111/j.1467-
6494.1992.tb00922.x
Vest, M.J., Scott, K., Vest, J.M., & Markham, S.E. (2000). Factors
influencing employee beliefs that pay is tied to performance.
Journal of Business & Psychology, 14(4), 553.

64. References
Weinert, F.E., &Helmke, A. (1995). Interclassroom differences in
instructional quality and interindividual differences in cognitive.
Educational Psychologist, 30(1), 15.
doi:10.1207/s15326985ep3001_2
Wilkesmann, U., &Schmid, C.J. (2012). The impacts of new
governance on teaching at German universities. Findings from a
national survey. Higher Education: The International Journal of
Higher Education And Educational Planning, 63(1), 33-52.
doi:10.1007/s10734-011-9423-1
Woessmann, L. (2011a). Cross-country evidence on teacher
performance pay. Economics of Education Review, 30(3), 404-418.
doi:10.1016/j.econedurev.2010.12.008

65. References
Woessmann, L. (2011b). Merit pay international. Education Next,
11(2), 72-77.
Zhao, J., & Gallant, D.J. (2012). Student evaluation of instruction in
higher education: Exploring issues of validity and reliability.
Assessment & Evaluation in Higher Education, 37(2), 227-235.