Is the Private Sector a Model for Merit Pay? | Teachers College Columbia University

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Is the Private Sector a Model for Merit Pay?

It has become commonplace for education policymakers to argue that the way to improve teacher quality is to pay teachers more if they are more effective. This, the policymakers say, is how the private sector works.
It has become commonplace for education policymakers to argue that the way to improve teacher quality is to pay teachers more if they are more effective. This, the policymakers say, is how the private sector works.

But it is hard to find private-sector examples for such merit pay proposals. True, an exception is stockbrokers and sales clerks who are paid on commission. But we all know this system can engender high-pressure tactics that benefit the commission-paid workers at the expense of their customers. Used-car salespeople may be an extreme case, but recent prosecutions of Wall Street brokers show that conflicts between the interests of incentive workers and their clients are always potentially present and must be carefully monitored.

Similar problems would arise in schools, where merit pay systems, when based heavily on test scores, give teachers improper incentives to emphasize tested over equally important untested aspects of the curriculum. And do we want school children to be pressured in ways that might be effective in getting adults to buy a used car?

This article was written by Richard Rothstein, research associate at the Economic Policy
Institute and a visiting professor at Teachers College, Columbia University. It appeared in the December 12th publication of the School Administrator.  

Published Tuesday, Dec. 13, 2005

Is the Private Sector a Model for Merit Pay?

It has become commonplace for education policymakers to argue that the way to improve teacher quality is to pay teachers more if they are more effective. This, the policymakers say, is how the private sector works.

But it is hard to find private-sector examples for such merit pay proposals. True, an exception is stockbrokers and sales clerks who are paid on commission. But we all know this system can engender high-pressure tactics that benefit the commission-paid workers at the expense of their customers. Used-car salespeople may be an extreme case, but recent prosecutions of Wall Street brokers show that conflicts between the interests of incentive workers and their clients are always potentially present and must be carefully monitored.

Similar problems would arise in schools, where merit pay systems, when based heavily on test scores, give teachers improper incentives to emphasize tested over equally important untested aspects of the curriculum. And do we want school children to be pressured in ways that might be effective in getting adults to buy a used car?

This article was written by Richard Rothstein, research associate at the Economic Policy
Institute and a visiting professor at Teachers College, Columbia University. It appeared in the December 12th publication of the School Administrator.  

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