Monopolies or Competition?

Supply and Demand or Price Controls?

Market Demand or Government Demand?

Pay Well for Quality or Pay MORE for Poor Quality?

I am really pondering now, but I don't have an MBA.

Recently the Governor of Texas set forth a proposal for incentives to promote excellence in education. Rewarding good behavior is a foundation for parenting, business, and society. Rewarding bad behavior only produces more bad behavior, right?

Seems like a simple concept.

Unfortunately, some members of the media, teachers unions and bureaucrats felt this was not a sound principle.

Here are some excerpts from others who have researched the subject for years:

Guiding Principles

• A good incentive system includes a combination of campus-level rewards, individual teacher rewards, and individual principal rewards. Campus rewards should apply to all schools in the state. Individual teacher and principal rewards should apply to all teachers and principals who choose the Professional Contract (see Hoover-Koret memorandum, Professional Contracts for Teachers and Principals ). Individual rewards should be generous enough to make teaching and administration truly professional in character and to serve as bona fide incentives for success.

• The pay and incentive system should directly incorporate quantitative information about student performance wherever practical.

• The system should also incorporate other information about performance, such as administrator evaluations and parent evaluations.

• Campus rewards should be based partly on students attaining high levels of achievement and partly on a school's having high value-added . In other words, if a school's students are performing at a very high level, the school should be rewarded. Also, if a school is raising its students' achievement substantially, it should be rewarded, even if their level of achievement is not high. A two-part system like this rewards schools that are close to the achievement “ceiling” as well as schools that start out far away from proficiency.

• It is valuable to have an incentive scheme for individual teachers and principals, beyond the campus reward system. This is because individuals are sometimes doing an excellent job in a school that is not doing well overall. T hey need to be encouraged to keep up their efforts rather than leave the school for one that is more successful overall.

• The individual teacher (and principal) incentive system should satisfy statewide criteria, but districts should be encouraged to design their own plans. For districts that do not want to design their own system, there should be a “default” plan.

Proposal from Hoover-Koret Task Force on K-12 Education, Hoover Institution

Primary Authors and Contacts: Eric A. Hanushek, Caroline M. Hoxby, Chester E. Finn, Jr.

1. New state monies that can be allocated to schools should be used to fund the incentive system. Rewards for schools, teachers, and principals are likely to improve achievement, but they would be difficult to implement in a revenue-neutral manner in the short run, assuming that districts are held harmless on total state aid. In the longer-run, the incentive system can be made revenue-neutral by allowing it to grow while phasing out hold-harmless levels for other aid. The total amount allocated to the incentive system must be large enough to make the campus rewards salient and to encourage teachers and principals to opt for the Professional Contract.

2. The incentive system should have campus rewards and individual rewards. The funds for rewards should be divided reasonably evenly between rewards for campuses and rewards for individual teachers and principals. The campus rewards will insure that staff in a school work together and will reward everyone in a successful school. The individual rewards will ensure that a person whose own value-added is high earns rewards even if she/he works in a school that does not have strong performance overall.

3. The incentive system should directly incorporate quantitative information about student performance wherever practical. The state's accountability system can provide direct information about not only the level of achievement in a school, but also about the value-added of that campus, its individual teachers, and its principal. By mapping the achievement of individual students to their teachers and principals over time, it is possible to separate teachers' and principals' value-added from other influences such as family background and prior preparation of students.

Using TAKS scores, it is feasible for the state to compute value-added for campuses, for individual principals, and for individual teachers who teach subjects that are tested by TAKS. Districts should be encouraged to develop their own beginning-of-year and end-of-year tests to compute value-added for teachers who offer instruction in subjects that are not tested by TAKS. Although specialized measures may be used for teachers who have unusual duties, all measures should be based on student achievement, not on a teacher's credentials or preparation. Computations of value-added are most reliable for teachers who are observed over at

least three years, so value-added computations should be used for teachers who have at least three years of experience in the Texas public schools (not necessarily in a single school).

4. The state should distribute campus rewards on the basis of both achievement levels and gains (value-added). Because the state wants students to achieve high proficiency, it should reward schools based on the percentage of their students who reach high proficiency. The key reasons for rewarding schools based on their level of achievement are (a) making the state's achievement goals salient, and (b) ensuring that students are challenged even if they begin with above-average achievement. Therefore, it is important that there be a high threshold for rewards based on the level of achievement. Because the state also wants to raise achievement in schools that begin with low initial achievement, the state should also distribute campus rewards on the basis of campuses' average value-added. Campus rewards should be based on the number of students whose achievement rises. Districts should establish their own rules for allocating each campus' reward (if any) within the school, but these rules should be transparent and publicly announced.

5. The system for giving individual teacher and principal rewards may incorporate information other than test results.  Tests provide objective measures of performance but do not cover all aspects of teacher performance. For these reasons:
• Districts should be encouraged to supplement value-added information with supervisor evaluations and parents’ evaluations.

• Districts should be encouraged to develop their own systems for rewarding individual teachers and principals, but districts’ plans should meet certain criteria so that true incentives are given. For instance, districts’ plans might have to satisfy these conditions:
– the plan must be publicly announced before the beginning of each school year.
– the percentage of reward based on value-added must be at least 50;
– the percentage of reward based on the supervisor’s evaluation must be at least 10;
– the percentage of reward based on parents’ evaluations must be at least 5.
• Although the state does not want to choose a one-size-fits-all plan for districts, there should be a default plan that can be used by districts that fail to adopt their own in a timely fashion. A default plan might determine rewards as follows:
– 60 percent on individual value-added;
– 25 percent on supervisors’ evaluations;
– 15 percent on parents’ evaluations.

6.When some teachers or principals in a district have opted for the Professional Contract, those teachers or principals will automatically become eligible for individual rewards. Once a teacher or principal in a district becomes eligible for individual rewards, his or her district will use the state's default plan until the district develops its own individual incentive plan that fulfills the state's criteria.

7. Evaluation: To ensure that the state and others learn from the state's reward system, data should be gathered that facilitate evaluation by the state and external researchers. The data should include information on the achievement levels and value-added, rewards earned, and districts' plans for individual rewards.

The state should:

1. Establish statewide training requirements only when it is clear that one mode of training is most effective in all cases.

2. Allow experimentation not only with new ways of training and certifying teachers and principals but also with new ways of assigning, compensating, and evaluating them.

3. Make teaching and school leadership attractive to people who want to be judged and paid on the basis of performance.

4. Eliminate job protection for experienced teachers whose efforts fall off. Performance should be expected throughout one's classroom career, not just at the beginning.

5. De-couple pay from seniority.

6. Signal the importance of performance by paying for it.

7. Allow schools to experiment with new combinations of teaching and technology.

8. Recruit principals who are effective executives, seeking them in many fields, not only education.

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