Making merit pay work

Merit pay motivates teachers if they fear losing compensation, writes Patrick Brennan, citing a new study.

Researchers offered performance pay to two groups of teachers in nine low-income K-8 schools near Chicago. Half were told they could get up to $8,000 at the end of the year, based on their students’ progress. The other half got $4,000 up front with the chance to make more if their students’ made above-average gains or give back money if their students showed below-average performance.

“Gain” groups showed weak but insignificant benefits for student achievement, while the “loss” groups showed very significant gains . . . “roughly the same order of magnitude as increasing average teacher quality by more than one standard deviation.”

Apparently, “loss aversion” is known to be a more powerful motivator than the hope of gain.

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