The Pay For Performance Plan

Margaret Heffernan once said, “For good ideas and true innovation, you need a mix of human interaction, conflict, argument, and debate.” In the article it is debated if there is any benefit in monetary rewards for students. Teachers, and parents alike are always trying to find the best way to reward and inspire there students to do well in school. Matthew G Springer is a professor of Public Policy and Education at Vanderbilt University. He is also the director of the National Center on Performance Incentives. He wrote this article to display his research and studies.

One of the main issues with merit pay for teachers is found in the manner in which it is measured. Most of the new performances pay laws and union contracts measure “effectiveness,” at least in part, by looking at the students’ test scores from one year to the next. One test score cannot paint a full picture of a student's accomplishment. Teachers unions have historically opposed merit pay, arguing that test scores are not an accurate measure of student achievement (Turner, 2010, para 15). Most teachers will report that a test will only show part of the picture. Standardized tests do not reflect life lessons, effective citizen traits, or character building traits that were taught that year. All of these traits thrive in an effective teacher’s curriculum.

     High school teachers’ average salary varies across the world. The United States is said to be one of the richest countries in the world, yet our teachers are being paid one of the lowest amounts. The Education Intelligence Agency, author of the article “Ohio Teacher Overcomes Union’s Tolerance” published an International Teacher Salary Report ranking the fifty states by “how much the average salary exceeded per capita personal income.” According to the Education Intelligence Agency Ohio’s percentage rate is only fifty- five point one percent. According to the Education Intelligence Agency the lowest state percentage is in South Dakota at twenty- three point six percent and the highest state percentage is

Merit pay is a short-term, pay-for-performance plan, with a typical life span of three to four years, in which employers provide rewards, usually in terms of a raise for past performance, for employees who perform their jobs effectively, which will lead to higher performing employees which will in turn lead to a better work environment and higher overall productivity. The concept of merit pay is most often mentioned in the context of educational and/or government civil service reform. With a merit-based pay system, the employer pays, with the idea that the employer will reward more productive employees with merit increases. This concept came about in an attempt to sustain high performance levels in the workplace linking merit increases, or increases in base pay, to employee performance ratings, which are taken at the end of a performance year, usually by a direct supervisor. Due to the ever increasing changes of supply and demand in business, in order to remain feasible, the merit pay system is expected to change consistently with the needs presented to the companies, whether it be foreign competition, consumer demands, producer limitations, etc.

In today’s society one of the most important factors in selecting a career field is rate of pay. No matter whether the profession maybe, the dollar figure must be within a range that allows the employee to maintain a substantial lifestyle. The debate of teacher pay scales has raged on for years. Many argue that the current pay scale for teachers is a scale which rewards teachers merely for seniority. They argue that the current pay scale overlooks those educators which demonstrate exceptional performance. Teacher merit pay systems have been the most popular suggestions made to remedy the problems seen with the current pay scale. Although the current pay scale may not be completely effective, the idea of

Cons: Opponents to merit pay believe it would result in a counter-productive narrowing of teacher’s goals and competition between educators who otherwise would promote meaningful collaboration (Ritter, 2010). In most instances, teachers can earn a pay raise in only two ways: experience and additional education credentials such as advanced degrees (Cowley, 2011). Cultural expectations for student performance are high in Asia which may mislead claims that performance pay increases student achievement (Woessman, 2011). A merit pay system may discourage top scholars from majoring in education. The evaluation instruments used to measure teachers’ performance are typically flawed and do not have strong research to back them. If we want teachers to support merit pay, we should be considering plans that offer substantial awards in the 10% to 20% of base salary; however, this is often not the case. Evaluations of teachers for merit pay are often subjective leading to widely inaccurate measurements. The first reaction of most teachers is skeptical and provokes anger (Ritter, 2010). Denver’s Professional Compensation for Teachers plan, the leading national example of performance pay, awards more money for earning another degree than for demonstrated performance in the classroom (Buck,

The best performance incentive plans are the ones that work, of course, but what works for employees - cash or days off - might not be what your organization can afford. Incentive plans that are effective at motivating billers must be affordable and targeted to specific results. Most importantly, they must be finite - that is, not a permanent entitlement.

Pay for performance systems have further been proven to have two advantages for organizations: attracting more high-quality employees and motivating employees to exert more effort at their jobs. (Gordon, Kaswin) This paper will show the positive benefits of performance pay as

employee. This is part of day to day management and is intended to ensure that

Ferracone, R. A., & Borneman, J. P. (2001). Putting pay for performance back into incentive programs. Compensation & Benefits Management, 17(4), 29.

This publication was a paper that was presented at the annual meeting of the American Economic Association. Hanushek and Rivkin’s paper spoke about the influences of teachers to student’s achievement, it can be seen that standardized testing is not a proper way in determining educational quality. With their value-added research, the statistics show the presence of a significant amount of differences in teacher effectiveness even within the same schools. Due to the fact that now in many districts “teacher effectiveness” is based solely on test scores concerns of personnel compensation, employment, and promotion are brought up, including the issues of cheating and teaching methods that are narrowly focused towards the test are an ongoing problem

Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration.  Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process.  Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).

This research essay will aim to answer the question of the effectiveness of pay-to-performance initiatives. This essay will begin by examining the efficiency wage theory and the research frameworks before analysing the implications of the backwards bending supply curve theory as well as the theory of diminishing returns. This essay will then conclude with an answer on the effectiveness of pay-for-performance initiatives.

One of the greatest Soviet leaders, Mikhail Ivanovich Kalinin, once commented that teachers are the engineers of human souls. With the rise of globalization, an increasing number of students are choosing to study aboard, especially in the United Kingdom. The importance of keeping and improving the overall quality of teachers in the UK is therefore extremely significant. Apart from the level of job satisfaction that motivates teachers to continue improving, the reward system also exerts a strong influence on teachers’ behaviour at work. In accordance with ‘New Pay’ approach, strategic incentives play an important role in achieving business objectives (Lawler, 1995). On one hand, overall payment levels compared to other occupations is a motivating factor, whilst on the other the internal payment system affects teachers’ performance as well. This report will offer a thorough analysis of the reward system for teachers in England and Wales, beginning with an overview of the general situation on teachers’ salaries and followed by a discussion on tangible aspects including base pay, variable pay, benefits and pensions as well as intangible aspects like non-financial benefits. By presenting all this information and analysing it clearly, I will offer some suggestions aimed at enhancing the total reward system for teachers in England and Wales.

Pay for performance is to link employees’ salary or salary increase to his or her performance. It seems to be a reasonable or attractive idea but it often does not work well in organizations. Please use at least 4 motivation theories or models to explain why pay for performance may not work as expected—particularly in government and nonprofit organizations.