Merit Pay for Teachers: A Meritorious Concept or Not?

©2000 Kathy A. Johnson

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This paper examines issues related to the current controversy of merit pay for teachers. A brief historical background of teacher compensation establishes a link between teacher pay and the existing political and economic characteristics of the broader society. Based on the work of Clabaugh and Rozycki, a technical analysis of the controversy is made to identify problems of understanding, fact and value that permeate both sides of the debate. Ethical and societal perspectives of the merit-pay issue are discussed using the framework of Ethics in School Administration by Strike, Haller and Soltis and School and Society by Feinberg and Soltis


Recent school reform concerns and a public "battle cry" for accountability in schools have fathered various plans to re-design teacher compensation systems based on merit. The controversy has existed for some time with arguments on each side of the issue. As early as 1987 in Education Week, Lynn Olson delineated the two stances as follows:

"Advocates contend that performance-based pay can meet the public's demand for accountability, help attract and retain talented professionals in the classroom, and motivate teachers to teach better.

Opponents say the programs are administrative nightmares that create competition and dissension among teachers to destroy morale. Such systems reward a few teachers, they argue, as a way to avoid paying all teachers well." (p.2)

You will note from the above descriptions, this controversy is replete with inconsistencies in regard to the effectiveness and outcomes of merit pay systems. Answering the "effectiveness" question is an important pre-requisite for any actions to initiate such a program and currently is the heartbeat of the existing controversy. There is however, a distinction that must be made between the effectiveness of a plan and the underlying concept of differentiated pay scales. From a historical perspective teacher compensation plans have been closely linked to existing political and economic issues. In the early 1800s, reflective of the barter economy of the time, local communities paid teachers with room and board. (CPRE, September 1995) The emerging cash economy and the organizational structure of the industrial era at the beginning of the twentieth century created a bureaucratic and often biased focus on position-based system for teacher salaries. Hence elementary teachers were paid less than secondary teachers and women and minorities received less pay than their male counterparts. (CPRE, 1995)

This system lasted until 1961 when the United Federation of Teachers (UFT) won the legal rights to act as the collective bargaining agent for New York City teachers and began the practice of negotiation for salary. This practice was solidified in 1988 with the emergence of a single salary schedule that eliminated elevated salaries for science and math teachers and awarded uniform salaries based on academic credits and years of service (Perkinson, p. 182) The emphasis of this structure was on service rendered as a teacher. This compensation system mirrored the way most workers were paid in the broader economy. Recent meritpay proposals have been suggested to better align this well established salary system with current reform issues that require teachers to take on different roles and expand instructional skills. These proposed revisions also appear to be more in line with the broader-economy focus not only on service rendered but also on results produced.

In a preliminary review of current literature on merit pay one finds examples of both effective and ineffective pay systems (Consortium for Policy Research in Education (CPRE), 1995; Kelley, 1996; AFT, 2000; Berman, 1999; King, 1998; Langenwalter, 1997; Ambrose, 1999; Jancy, 1996) along with analysis of the differences between them (Kelley and Odden, 1995; Urbanski, 1997; Olson, 1987) and answers to the question of "how-to" implement a successful merit system. (Kelley, 1996; CPRE, 1995; Education Week, Feb. 1998) What is not as prevalent (perhaps non-existent) in examining proposed teacher-compensation changes are answers to the question of whether or not we "should" adopt a system of merit pay from a moral perspective. Is "effectiveness" in reaching a goal the only criteria we should use in making decisions? A child with no money in his/her pocket wants a candy bar and thus steals it from the store. Stealing in this case is an effective method of obtaining the candy but is it the right thing to do? It appears to be the classic argument, do the ends justify the means? Outside the scope of this paper but also interesting to ponder are questions regarding the nature of the ends (goals) targeted by the merit pay approach.

This treatise will utilize a two-prong investigation of the current educational controversy of merit pay for teachers. One will be an analysis of the controversy based on the criteria outlined in Clabaugh and Rozycki, Analyzing Controversy as confirmed by current literature on the topic. The second will be an attempt to address the ethical and societal issues discussed by Strike, Haller and Soltis in The Ethics of School Administration and School and Society by Feinberg and Soltis.

Analyzing the Controversy

Using the outline presented in Analyzing the Controversy by Clabaugh and Rozycki one finds the debate about merit pay poses a fundamental dispute fraught with problems of understanding, fact, and value as well as basic background problems. Let's look further at the Clabaugh model as it pertains to each of these issues.

Initial attempts at creating merit-pay systems in schools were typically based on criteria that was narrowly defined or subjective (such as linking student test scores to teacher effectiveness; or merit tied to one administrator's evaluation of a teacher). In addition the awarded pay was often minimal and established using a competitive format where there was one "pot of money" shared by all eligible teachers. Many of these early merit-pay attempts have met with failure. A fact, I might add, that is used by opponents to demonstrate ineffectiveness of the concept. The shortcomings of these initial programs coupled with a long-standing historical base have created a basis for many of the problems related to the current merit-pay controversy.

Early attempts were initiated as solutions to public concern that "schools must be accountable" and requests to "make teachers accountable". Although few would pick up the banner to argue against these slogans, they provide no answers to the relevant questions, Accountable to whom? For what? Measured by what criteria? Once these questions are asked, the division lines of opinion begin to form.

The concept of merit pay cannot be implemented in a school without a plan as to how it will work and what it will look like. Arguments disputing various options, logistics and administrative structures provide enough ftiel to keep the controversy burning without throwing on the extra log of debating the merit of the concept itself. If, however, one were to engage in such a debate it would seem logical to begin by identifying an authority to define the concept in the educational context. This search produces one explicit definition for "merit pay" in Education Week glossary: " Any number of plans to pay teachers on the basis of their demonstrated competence in teaching."

On an interesting note, this definition further states, "The pay plans are controversial because it is difficult to objectively identify good teaching, and many argue that such plans would be little more than popularity contests." Although not pertinent to the definition itself, this addition provides an appropriate commentary regarding problems of understanding and fact. The obvious controversy based on this definition hangs on clarification as to what exactly is meant by "demonstrated competence in teaching." To further cloud the issue, implicit definitions of merit-pay often unite the idea of teacher competence with student grades or test scores.

The implementation of merit pay is also based on presuppositions that extrinsic rewards or money will be a motivating force for teachers to create the desired results. The functionalist view of meritocracy as explained by Feinberg is that it "depends on people wanting what is offered as a reward." (p. 25) And, on a deeper level, even if extra money were a motivating factor, would it alone produce more effective teaching? For example if "the demonstration of teacher competency" is defined in terms of improved student grades, could monetary rewards not also produce results such as grade inflation or creative adjustment of grade criteria to create the illusion of higher achievement.

A careful look at discussions on both sides of the controversy reveal strong underlining emotional attachments to one's position of choice. Restructuring a pay system represents a change in practice and evokes the typical range of human response to change in general. Throw in political (power, affiliation) and economic factors (benefits vs. costs, who pays) to the mix and one finds a breeding ground for debate.

Ethical and Societal Perspective

Understanding merit pay in terms of how it works and its effectiveness in relation to achieving targeted goals is by definition tied to a particular system of delivery. The controversy is broadened by recognizing the existence of a plethora of plans for merit pay such as career ladder, pay at risk, skill based and group based options. (CPRE, 1995) As these components of the controversy continue, what about the underlying conceptual controversy? What are the moral questions of the debate? Clearly it is the moral responsibility of schools to fulfill the public trust by executing the business of education to the best of their ability. Any arguments that even vaguely suggest we should in any way shirk from our responsibility to provide educational services to students are automatically dismissed. The desire to have competent teachers in our schools is a given. The morality questions we need to center on relate to striking a balance of all the factors involved and doing the right thing. What "ought" we do? The ethical question of merit pay for teachers is one that targets the concept of merit pay itself and focuses on the question. "Should we pay teachers by a differentiated scale based on their competency?"

The ethical question can not be answered devoid of consideration for the implementation of merit-pay program. The target results of that program and the process used to develop it will provide relevant testimony regarding ethics. If for example we develop a democratic decision making model "... that fairly considers the wants of each individual and that gives each individual a fair chance to affect decisions, we exhibit respect for the freely chosen value of individuals." (Strike p. 97) This process would support the principal of equal respect and perhaps supply an ethical beginning. If our plan incorporates equal opportunity for participants and the qualifying criteria do not restrict participation; one could argue that teachers are able to exercise their individual judgment and therefore they are equally respected. Functionalists would also approve of the placement of this "equal opportunity plank" in the foundation for an ethical system.

In addition, if in the development of a merit plan program careful thought is given to the considerations required for due process than we may enhance our case for an ethically based plan. The final decisions made regarding the logistics of a plan are not as important as the process by which they are developed. (Strike, p. 76) If we give equal regard to all opinions and sides on the issues and allow the opportunity for all parties to bring forth evidence supporting their views we have provided a rational base for making decisions. In carrying out our merit play system provisions for due process would also have to be built in. Strike gives an appropriate example of how this may impact on merit pay as follows, "Due process requires that if test scores are to be used in evaluating teachers, one must be able to show that differences in scores are due to differences in teaching ability, not to differences in student ability." (p. 77)

The principle of benefit maximization would have us look primarily at the results created by using merit pay for teachers. Merit pay is given to teachers who have demonstrated teacher competency already so it would appear that the "results" have been attained prior to the event. This would appear to indicate that the purpose of merit pay is not so much to create competent teachers as it is to reward them for attaining a certain level of competency. We must, for the sake of argument then, assume that the desired result of merit pay is to motivate teachers to demonstrate competence and/or become more competent. The natural, but not necessarily accurate, conclusion is that students will then ultimately reap the benefits.

Benefit maximization proponents might argue that it is ethically justified to allocate more money to teachers demonstrating competence because the ends justify the means. The simple argument would be that merit pay (the means) creates more competent teachers (the ends). In the final analysis this is the only test for the principle of benefit maximization. Offering additional pay as a reward is therefore justified toward the goal of teachers demonstrating competence. If these benefits are ultimately passed along to students in the form of learning or a better education; it would certainly construct a case for attainment of greater benefits and strengthen the moral argument based on benefit maximization principle. Whether or not this would (or does) actually happen is a topic for another paper.

This benefit maximization stance might also be supported by modem functionalists who would view the development of the teacher's competency as an investment in "human capital". (Feinberg p. 27) Feinberg's analysis explains various societal views of schools. To turn this analysis back on the internal workings of school is a bit like watching a TV show of people watching the same show. For example, in discussing the functionalist view of developing the special talents of people, Feinberg uses the example of schools encouraging a select few talented people to endure the years of training and pursue a career in medicine. He ftirthers explains, "Therefore as encouragement for talented people to undertake this special sacrifice, society provides extra incentives. Higher income and enhanced status are [one] way of providing such incentives" (p. 16)

If we turn this example back into the schools as a microcosm of society and apply it to teachers in pursuit of greater competence it appears an argument has been made for schools to reward teacher efforts with merit pay. Compulsory education laws are a requirement in the functionalist view because they "[facilitate] the development of new skills that the continuous expansion of technology requires." (Feinberg p. 17) Applied to teachers this may relate to the need to require on-going professional development after original certification and a move toward increasing teacher competency in order to keep abreast of changes in society. But it does not necessarily follow that teachers should be paid to keep current.

In attempting to determine the moral "rightness" or "wrongness" of paying teachers for their abilities, a seemingly appropriate guideline might be the principle of equal respect. Based on the inherent dignity and value of all people, does the action of holding the abilities of one person in greater esteem than another honor all equally? Does rewarding or not rewarding a person based on individual traits demonstrate equal respect? These questions cut to the core of the principle of equal respect. By rewarding some teachers for competence and not others or by using any kind of sliding scale to asses the relative competence of teachers are we respecting their equal and intrinsic worth? Using the principle of equal treatment explained in Strike, people who are relatively the same according to any given circumstances should be treated the same. (p. 54) Teachers are the same relative to the circumstances that call them teachers. They are in the school, teach students, operate by the same contract to provide services and therefore should be treated the same.

On the other hand is a differing level of competence sufficient to evoke the corollary to the principle of equal treatment. "people who are relatively different should be treated differently"? (Strike, p.54) One teacher's level of competence, for whatever reason, is more likely than not to be different than another teacher's competency level over a broad range of circumstances. Having articulated the circumstances and criteria for competence is that sufficient to demonstrate a relative difference in teachers and therefore is different treatment (merit pay) warranted? Feinberg describes a similar view. "In the ideal, functionally organized, modem society, individuals with equal talent and motivation to perform in an area of comparable need would be rewarded equally." (p. 29) If it follows that unequal talents and motivation should be rewarded unequally, then it would appear the functionalist view would look precisely to the talents and motivation of individual teachers to determine their qualifications for merit pay.

Strike explains this principle as it pertains to merit pay in a nutshell. "Inequality in the distribution of resources is permitted only if all benefit." (p. 59) If some teachers receive merit pay and others do not than clearly the resources have been unequally distributed. The ethics of this question based on the maximum principle would then rest on one demonstrate a case for how the teachers not receiving the merit pay benefited.

Is the concept of merit pay for teachers meritorious? On the practical level, having reviewed available literature it is clear that some merit pay implementation programs are more meritorious than others. With the existing myriad of options available from which to frame a conceptual meaning of merit pay, there appears to exist various degrees of value to the concept. Determining the moral merits of the merit-pay controversy is difficult. One must trust that individuals and individual school districts will exercise their status as moral agents to fully examine the issues before coming to any conclusive decisions.

Meritorious or not, in the words of the president of the Rochester Teacher Association, Adam Urbanski, "Merit pay is not going to go away until there are some alternatives to it." (p. 2) Compensation plans alone will not "fix" all the problems in education. However, as pointed out by Kelley, compensation may be a tool that, if designed fairly and supported by all participants, could be used to promote excellence in education. (1996) One may note in reviewing current educational literature on the topic that most successful plans to develop teacher competence steer clear of any mention of the words "merit pay" and are structured around completion of specific skill training. This may be a result of learning from the mistakes of initial merit pay proposals and making attempts not to ignite the emotional passions of those with vested interest. Or perhaps based on the historical roots of teacher compensation the transition from the established payment for completed college courses to payment for completion of other formal types of training is a more natural bridge to cross over the controversy. In any case it is clearly a "bridge over troubled water" as the merit pay controversy rages on.


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