Show Them the Money? Why Merit Pay Doesn’t Work

Last week, Newark school district revived the debate on merit pay for teachers when the union passed a new teacher contract that awards $5,000 bonuses to highly effective teachers and up to $10,000 bonuses for highly effective teachers in low-performing schools and high-need subject areas like math and science. Proponents of merit pay argue for incentivizing effective teachers, while opponents of the measure claim that it will pit teachers against each other to the detriment of students. Merit pay doesn’t work, but not for the reasons cited by the opposition.
Schools are not businesses and school districts are not corporations, but like businesses and corporations, schools and school districts are operated by humans, which means that basic laws of human nature apply. Educational leaders would do well to explore some of the literature and research on motivation and leadership that has been so heavily marketed to the corporate world. Almost all of the business and social science research from the last decade on motivation, drive, leadership, management, retention, and job satisfaction agrees: it’s not about the money.
Again and again, research shows that the carrot/stick approach fails to motivate people. Daniel Pink, the author of Drive: The Surprising Truth about What Motivates Us, draws on 50 years of behavioral science research to argue that external rewards like money are not motivators for high performance. Instead, Pink’s research shows that the best motivators are intrinsic: autonomy, mastery, and purpose. When implemented strategically, these motivators lead to increased job satisfaction, higher retention rates, and stronger organizations.
One of the most famous case studies illustrating this point is Tony Hsieh’s turnaround of Zappos. When Hsieh became CEO of Zappos in 2000, the company was worth $1.6 million and floundering. By 2009, Zappos was worth over $1 billion and cited as a world class example of corporate culture and growth.  Zappos achieved success by empowering every employee, down to call center representatives, to make whatever decisions necessary to make the customer happy.  Hsieh instilled a culture of delivering happiness (the purpose) and then gave every single employee the autonomy to achieve that purpose. He didn’t build a company of devoted employees on bonus checks.
In spite of overwhelming research to the contrary, education “reformers” still think waving a fat check in front of teachers will somehow lead to higher test scores. This is insulting. It indirectly suggests that teachers are not already doing everything in their power to teach students successfully. It implies that by sweetening the deal with a few grand, teachers will magically whip out a secret arsenal of teacher tools they’d been holding out on until the district ponied up the cash. Oh, there’s a check at the end of the line? Well, I guess I’ll teach Johnny to subtract, after all! Sound ridiculous? It is.
No, school districts aren’t selling shoes, and they’re not looking to make a profit, but there is (or should be) a uniting purpose to educate students and grow their academic success. That won’t be accomplished with a carrot/stick approach. It will be accomplished by giving teachers the autonomy to make decisions about how to teach their students and increase their own teaching mastery.
If you want a dog and pony show, then offer ribbons and prizes. Real, systemic growth and change can’t be bought.