ERIC Identifier: ED259453
Publication Date: 1984-00-00
Author: Ellis, Thomas I.
Source: ERIC Clearinghouse on Educational Management Eugene OR.

Merit Pay for Teachers. ERIC Clearinghouse on Educational Management: ERIC Digest, Number Ten.

The success of a merit pay program depends primarily on careful, cooperative planning involving all constituencies who will be affected, so that the resulting plan is affordable, acceptable to teachers, and adapted to district needs. Criteria for awards should reflect the goals of the program and should be applied fairly and consistently by trained evaluators.

Failure of merit pay normally results from ambiguous or inconsistent standards, remote or authoritarian planning, or arbitrary award determinations (all of which engender teacher opposition) or from unforeseen administrative complexities and budget limitations.


Merit pay in the broadest sense is a generic term for any device that adjusts salaries or provides compensation to reward higher levels of performance. It comes in many different forms, including merit-based salary schedules, bonuses, incentive pay, and differential staffing or "master teacher" plans. Merit pay can be linked to a district's regular single-salary schedule (teachers with high ratings advance up the scale more quickly), or it can be administered as a separate "merit pay schedule" (supplementing the regular salary). Participation by teachers can be either mandatory or voluntary.


Higher pay for teaching effectiveness can be awarded on the basis of input criteria (teacher performance) or output criteria (student performance). Input criteria may include classroom management skills; preparation of lessons; knowledge of subject matter; instructional techniques; management of student, staff, and public relations; professional ethics; or professional growth.

While past systems were largely based on input, current systems tend to be based on output, whereby the degree of progress in achieving specified goals determines the amount of benefits that the teacher receives. These goals may be measured by criterion-referenced tests to ascertain students' mastery of prescribed course content or their ability to perform certain skills. In some programs, teachers are responsible for proposing objectives for themselves or for their students, the fulfillment of which entitles the teacher to merit pay.

In addition to superior teaching performance, extra pay also may be awarded for such factors as professional development, additional responsibilities, teaching at a high-priority location, contributions to the total school program, teaching subjects for which there is a teacher shortage, and even for outstanding teacher attendance. "Incentive pay" denotes such programs which reward teachers for helping the school district achieve certain goals or solve specific problems.


Differential staffing or "master teacher" plans depend on an organizational hierarchy or career ladder to compensate teachers on the basis of experience and qualifications. In contrast to regular merit pay programs, these plans assign additional professional responsibilities at each level of advancement, as well as increasing salaries.

Typically, these responsibilities include supervising beginning teachers, assisting peers, evaluation, and curriculum development. Once selected for a position on the hierarchy, teachers are retained there only as long as they perform at a satisfactory level.

Most of the "master teacher" proposals under consideration in the various states also call for modifying teacher certification programs. The proposed "Better Schools Program" in Tennessee, for example, involves four levels of certification: "apprentice teacher," "professional teacher," "senior teacher," and "master teacher."

The advantage of differential staffing over other forms of merit pay is that the prestige and responsibility that comes with higher rank are an intrinsic motivation, above and beyond financial reward, for excellent teachers to remain in the profession. Also, teachers who are promoted to more responsible positions are less apt to incur resentment from their colleagues than teachers who are paid more for the same work. Furthermore, when experienced teachers are involved in assisting and evaluating their peers, there is less likelihood of contention between staff and administrators throughout the evaluation process.


There are three primary considerations to keep in mind while planning a merit pay program:

--What are its objectives?

--What evaluation criteria and methods will be used?

--How will the program be perceived?

More than most adminstrative innovations, merit pay depends, for its success, on the support of all who will participate or be affected--board, administrators, teachers, and community. All these groups should therefore be included in the planning process. As Cramer suggests, putting a merit pay plan into effect involves long sessions of persuasion and compromise, drawing upon all the human relations and management skills a school board can muster.

Before deciding whether to institute a merit pay program, board and administrators should establish a committee including a board member, administrative team members, and classroom teachers to research the topic and make recommendations for design. Research should be directed at finding out what has and has not worked in similar school districts, and surveys should be conducted to determine what teachers will support. (At this stage, opinions should be solicited from the local teacher's union as well.)

The next step is to decide what you want (and do not want) by drawing up a list of objectives. These can be either general or specific in scope, depending on district needs. The general objectives of most merit pay programs include improvement of instruction, incentive for professional growth, rewarding good performance, and attracting good teachers. Keep in mind that if your program is to be successful, the amount paid must provide a real incentive to improve performance, all teachers must be evaluated on the basis of agreed-upon criteria, and evaluations must be conducted fairly and impartially by trained personnel. Avoid arbitrary quotas on the number of teachers who can be recognized, for such quotas can only lead to resentment of those selected by those who are passed over.


Because of the need for well-documented evaluation procedures and the variable salary schedule, the administration of a merit pay program can be cumbersome. A proposed budget must take into account not only the salary increments, but also the cost of evaluation (including that of training evaluators) and the possibility that a greater number of teachers will qualify for merit increases than originally predicted. Due to these complexities, additional adminstrative staff may well be needed, adding yet another item to the proposed budget.

Other factors to consider in determining the administrative feasibility of a merit pay program include compliance with state law, the level of trust between management and teachers, and public relations. A merit pay schedule must conform to state tenure, employment, and collective bargaining laws.

The best way to build the requisite trust between the administration and staff is to involve teachers in all phases of program development, especially in drafting evaluation criteria. Some schools have developed "quality circles," consisting of four to eight teachers and the school principal, to provide a continuing liaison between the teaching staff and the merit pay development committee. These groups review committee proposals, obtain feedback from staff members, and submit recommendations to the committee at each step of the planning process.

There is a continuing debate about whether the names of merit pay recipients should be publicized. The dangers of publicizing the names include embarrassment for those who do not make the list, enmity between staff members, and lopsided class enrollments or possible legal action by parents demanding equal access to "superior" teachers for their children. Strict confidentiality, on the other hand, can lead to rumors of favoritism.

Depending on district politics, it may be necessary to publicize the success of the program in some way to promote taxpayer support. But such publicity need not mention names; for example, published statistics indicating a rising percentage of teachers eligible for merit pay would also convey a program's success to the community.


A board policy should thus include the following components:

--Objectives of the merit pay program --Criteria to meet in order to be eligible for merit pay --Procedures for application --Evaluation criteria --Evaluation and documentation methods --Merit pay schedule --An appeals procedure

The plan should also be subject to periodic review to ascertain whether it is meeting the objective for which it was originally designed.

One thing that will not work, as Cramer observes, is a small pilot program, later to be expanded, since this would almost inevitably incur resentment toward those few teachers selected to participate or to be given awards. Cramer concludes with the following timely caveat: "Unless you plan carefully and include your entire teaching corps in an evaluation plan that it helps develop, your merit pay plan is doomed to failure."


Cramer, Jerome. "Yes--Merit Pay Can Be a Horror, But a Few School Systems Have Done It Right." AMERICAN SCHOOL BOARD JOURNAL 170 (September 1983):28, 33-34.

Darling-Hammond, Linda, and Arthur E. Wise. "Teaching Standards, or Standardized Teaching?" EDUCATIONAL LEADERSHIP 41 (October 1983):66-69.

Kohut, Sylvester, Jr., and Jill D. Wright. "Merit Pay Movement 1980's Style." EDUCATIONAL HORIZONS 62 (Winter 1984):52-54.

McIntire, Kenneth E. "The Merits and Demerits of Merit Pay." NASSP BULLETIN 68 (Febuary 1984): 100-104.

MERIT PAY PLANS FOR TEACHERS: STATUS AND DESCRIPTIONS. ERS REPORT. Arlington, VA: Educational Research Service, 1983. ED 236 771.

Newcomb, Ellen. REWARDING TEACHERS: ISSUES AND INCENTIVES. Philadelphia, PA: Research for Better Schools, 1983. ED 236 143.

Robinson, Glen E. "Paying Teachers for Performance and Productivity: Learning from Experience." ERS CONCERNS IN EDUCATION. Arlington, VA: Educational Research Service, 1983. ED 233 483.

Scherer, Marge. "Merit Pay: The Great Debate." INSTRUCTOR 93 (October 1983):22-25, 159.

Shaten, N. Lewis. "Merit Pay Does Not Have to Be a Four Letter Word." NASSP BULLETIN 67 (December 1983): 56-63.

Van Loozen, Lu. SOME POINTS TO CONSIDER WHEN YOU DISCUSS MERIT PAY. Arlington, VA: American Association of School Administrators, 1983. ED 245 336.

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