Performance pay – all US$18 billion of it

By Toilandtrouble

US President, Barack Obama is reported to be rightly furious at Wall Street executives’ greed (and temerity) in helping themselves to US$18 billion in bonuses out of the US $770 billion package American taxpayers stumped up to rescue them.

They seem to have forgotten that the money wasn’t actually a reward for their performance. In fact most people feel pretty gutted and disgusted by the decades of excess that have led to the near-collapse of the global financial system. As everyone else faces mortgagee sales and job losses all they can think about is lining their pockets.

And it’s not just Wall street, consider the total rort that Enron executives foisted on America driven by the search for an ever higher share price to justify their rising bonuses.

Throughout the world, people are asking questions about how CEOs who have wrecked the shareholder value in their companies and damaged clients, can still engineer themselves performance bonuses. Poly Toynbee in the Guardian has a much-deserved swing at corrupt and greedy CEOs who can’t seem to understand that the party is over.

And as she says: ” In the real world 2,500 people a day are losing their jobs. A home is repossessed every 10 minutes.

In the light of all this you have to wonder why there are still people in New Zealand who think that performance pay is some wonderful breakthrough.

“Performance pay for teachers would help get better educated students”.

Commenting on National’s education statement today, Business NZ Chief Executive Phil O’Reilly said it was time teachers caught up with other professions in achieving performance pay.

“It’s the consumer who benefits when professionals are paid according to performance,” Mr O’Reilly said. “New Zealand businesses wanting skilled employees are key customers of the education system, and they would welcome better financial incentives for teachers.”

Now how exactly would that work? Even if we set aside the practical difficulties in sorting out those teachers who can walk on water from those who can only pass water how exactly would paying a few more teachers (and it would be a few given how tight money is at the moment) lead to the educational nirvana O’Reilly promises? Whatever skills O’Reilly has they don’t include reading the writing on the wall. If you set up systems that reward greed and selfishness, human nature will corrupt accordingly. If you set up performance pay for teachers, they will obligingly (though with great irritation) jump through the hoops. This is exactly what happened in the the UK scheme where over 95% of teachers passed the test. There was no evidence that the payments had any effect whatsoever on student achievement though the goal-setting and appraisal which went with it might have.

As we already have appraisal systems in New Zealand it’s unlikely that such an exercise undertaken here would have any positive educational effect at all. In fact students might be worse off given the time wasted in undertaking these farcical activities and the damage done to collegial relationships when people are treated like lab rats.

Better to follow the advice of American writer and researcher Alfie Kohn who says:

“…My formula for how to pay people distills the best theory, research, and practice with which I am familiar into three short sentences: Pay people well. Pay people fairly. Then do everything possible to take money off people’s minds. Notice that incentives, bonuses, pay-for-performance plans, and other reward systems violate the last principle by their very nature…”

Theory, research, and practice all suggest that carrots (merit pay for teachers, cash rewards for students) and sticks (public shaming, threatening to close down schools that need help) are as ineffective as they are insulting.

We need to shift the terms of the debate so that we have a clearly articulated and understood agenda for teacher professional learning and career progression. Similarly, we need to consider how best we pursue (or support) research that reflects the complex factors that impact on students’ opportunities to participate in learning – and on learning outcomes. Quasi-market models for schools, blame and shame targeting ‘failing’ schools, divisive pay rates or differentials, league tables and other crude measures of ‘good’ and ‘bad’ in education, as ever, do not help.