Evaluation of Merit Pay Program in New York Finds Group Bonuses Had Little Impact

In late January, New York City announced that it would be suspending a pilot program which awarded a bonus to all teachers at schools that met performance targets, in part due to tough economic times, but also due to uncertainty over the impact of the program on student performance.

As a department spokesman told Sharon Otterman of the New York Times, “This was always a pilot program, and we don’t yet know its impact on student achievement. We have commissioned an independent study by the RAND Corporation that is due late this spring, and we will make a determination about whether to continue this program based on the results of that study.”

A study posted on the EdNext website today looks at the impact of the program so far.  In “Does Whole-School Performance Pay Improve Student Learning? Evidence from the New York City schools,” Sarena Goodman and Lesley Turner are able to isolate the impact of the merit pay program because it was implemented in a randomly selected subset of the city’s most disadvantaged schools.

They conclude:

We find very little effect overall, positive or negative. There is some evidence, however, that the program had a positive impact in schools where teachers were few in number, an environment in which it may be easier for teachers to cooperate in pursuit of a common reward. The study leaves open the question of whether a bonus program that rewards teachers for their own specific effectiveness would be more successful.

In the first year of the program, 55 percent of participating schools received bonus payments, and in the second year, 91 percent of schools earned bonus awards. This year only about 15 percent of schools earned the awards, due in large part to a change in the grading system for state assessments that raised standards.

For more, please see “Does Whole-School Performance Pay Improve Student Learning? Evidence from the New York City schools,” by Sarena Goodman and Lesley Turner, which will appear in the Spring 2011 issue of Education Next and which is now available online.

NB: The study is summarized in this press release.

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