There is little evidence that Performance-Related Pay (PRP) improves the quality of teaching.
The Sutton Trust found that relating pay to performance had “Low or no impact for moderate cost, based on very limited evidence.” It concluded that “investing in performance pay would not appear to be a good investment without further study” and “Performance pay has been tried on a number of occasions, however the evidence of impact on student learning does not support the approach.”
The Organisation for Economic Cooperation and Development (OECD) studied PRP after the 2009 PISA tests. It concluded:
“Performance-based pay is worth considering in some contexts; but making it work well and sustainably is a formidable challenge.”
The Project on Incentives in Teaching (POINT) researched the use of bonuses by the Metropolitan Nashville School System over three years. Researchers found the use of bonuses linked to performance did not contribute to improved pupil outcomes. POINT had little effect on teachers' classroom practice. The researchers pointed out they only studied one particular model of performance pay, however, and other systems such as linking incentives with professional development might work. However, this had not been tested.
Dan Pink, author of Drive: The Surprising Truth About What Motivates Us, found that encouraging workers or learners with external rewards like money was a mistake. What really motivates people is:
(a) Autonomy – self direction is more motivating than top-down direction
(b) Purpose – people like to feel they are making a contribution.
(c) Challenge – people are motivated by being able to improve their own competence
Pink’s philosophy can be summarized as the APC of motivation.
CONCLUSION: There is little evidence that PRP would improve educational outcomes and may be counter-productive if it leads to a narrow focus on measurable goals like test results.
See this thread for more details.
Updated 26 March 2014