One of the key parts of the Obama-Duncan approach to education form is the implementation of merit pay for teachers. Perhaps in light of the release of a new study by the Economic Policy Institute, the administration can persuaded not to go down this track. Perhaps the train has already left the station. In case it has not, I think I should draw your attention to this report.
Education Week, the most important publication for staying current on educational matters, posted today a piece entitled Report Points to Risks of Merit Pay for Teachers, of which the opening paragraph reads
Merit-pay plans for teachers may be growing more popular with politicians, but a report released today argues that such compensation plans are rarely used in the private sector and can sometimes bring about unintended negative consequences.
The report is a book entitled Teachers, Performance Pay, and Accountability -- What Education Should Learn From Other Sectors. I will explore a bit of the Ed Week article, and the material online from the book, and offer a few thoughts of my own.
First, since you already have the link for the Ed Week article, let me provide one for the information on the book at the Economic Policy Institute website: if you go here, you will be able to read the introduction and to see the general outline of the book.
Let me start with the Ed Week article and offer a couple of snip:
he study finds, for example, that in the 2005 National Compensation Survey, only 6 percent of workers received regular, output-based payments in the strictest sense. Even the growing number of bonuses that are not linked to specific measures of productivity account for just 2 percent to 3 percent of overall pay, the report says.
art of the problem, explains EPI economist Richard Rothstein in the second half of the report, is that pay-for-performance plans based on narrow indicators often lead to unintended, negative consequences—sometimes because workers game the system or sometimes because the measures themselves induce perverse incentives.
...researchers have documented instances in which the advent of health-care "report cards," which report mortality rates on a hospital-by-hospital basis, led some providers to decline to treat more difficult, severely ill patients. Mr. Rothstein says similar consequences have resulted when police departments set ticket quotas or when television stations conduct promotions that artificially boost their ratings during "sweeps weeks," so that they could set their advertising rates higher.
Rothstein continues this analysis by pointing at the stock market. And I note that long time watchers have noted the distortions to the underlying business when managers have bonuses tied to quarterly stock performance, which leads them to make business decisions designed to maximize short-term stock performance versus the long-term health of the company.
This leads me to examine what Dan Koretz offers in the preface to the book. Let me offer what I think is the key part, three paragraphs in which Koretz analyzes the 3 key issue with performance pay, especially as tied to test scores:
The first of these critically important issues, addressed in the first section of this volume by Scott Adams and John Heywood, is that the rationale for the current approach misrepresents common practice in the private sector. Pay for performance based on numerical measures actually plays a relatively minor role in the private sector. There are good reasons for this. Economists working on incentives have pointed out for some time that for many occupations (particularly, professionals with complex roles), the available objective measures are seriously incomplete indicators of value to firms, and therefore, other measures, including subjective evaluations, have to be added to the mix.
And that points to the second issue, known as Campbell’s Law in the social sciences and Goodhart’s Law in economics. In large part because available numerical measures are necessarily incomplete, holding workers accountable for them—without countervailing measures of other kinds—often leads to serious distortions. Workers will often strive to produce what is measured at the expense of what is not, even if what is not measured is highly valuable to the firm. One also often finds that employees "game" the system in various ways that corrupt the performance measures, so that they overstate production even with respect to the goals that are measured. Richard Rothstein’s section in this volume shows the ubiquity of this problem and illustrates many of the diverse and even inventive forms it can take. Some distortions are inevitable, even when an accountability system has net positive effects that make it worth retaining. However, the net effects can be negative, and the distortions are often serious enough that they need to be addressed regardless. To disregard this is to pay a great disservice to the nation’s children.
The third essential issue is score inflation—increases in scores larger than the improvements in learning warrant—which is the primary form Campbell’s Law takes in test-based accountability systems. Many educators and policy makers insist that this is not a serious problem. They are wrong: score inflation is real, common, and sometimes very large.
I have several times in the past written about Campbell's Law, first offered in 1976, which simply put is like this: The more any quantitative social indicator is used for social decisionmaking, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor. Others have written cogently on this subject, pointing out a history of more than a thousand years that supports Campbell's formulation.
That does not mean I want to argue for no assessment or evaluation. But there are dangers in using such assessments as a means of rewarding teachers. In the Ed Week article we read Rothstein writing about education that
"most policymakers who now promote performance incentives and accountability, and scholars who analyze them, seem mostly oblivious to the extensive literature in economics and management theory documenting the inevitable corruption of quantitative indicators and the perverse consequences of performance incentives that rely on such indicators."
Education and schools have seen multiple attempts at imposing business models upon them, whether it is describing our students either as our products or as our customers. They are neither - they are our responsibility, but we require their cooperation, which we can invite or cajole, but can neither successfully purchase nor consistently demand by fear or threats.
Of greater importance, too often what has been brought to schools are ideas that are not even all that successful in business. Here, in the case of the way merit pay has been done, the study reinforces what many of us have already observed. (1) such an approach is not all the widespread in the business world; and (2) where it is used it has as often as not had no discernable positive impact and often results in deleterious activities, things contrary to the supposed intent of improving meaningful performance.
The EPI report is apparently the first of three on this general topic, intended to broaden people's understanding of an important current topic. I would suggest that reading the material already available, without even absorbing the entire report, will probably lead to serious skepticism about the wisdom of rushing ahead with using federal dollars for such merit pay plans. One can only hope.