Lyons on Merit Pay

May 24th, 2012 at 9:00 am by David Farrar

writes in the Herald:

A key rule of economics is that incentives shape human behaviour for better or worse. I am starting to like the idea of for teachers.

I have taught for more than 20 years. I have authored text books in my subject and been a lecturer for beginning teachers in commerce.

I think a merit-based system of pay would suit me.

I think Mr Lyons would do very well with merit based pay also. While not the most scientific of methods, he gets excellent comments and ratings at Rate my Teachers:

Brilliant mate … the man can not be faulted … Probably the best teacher in NZ … legend … Peter Lyons is a legend. He defines economics.

With such glowing references from his students it is with trepidation I challenge his column, but I will. Peter said:

I teach economics, which is an option students can choose to take. If performance pay was introduced the first thing I would do is restrict those students who could take my subject. There will be no low achievers or slackers taking my subject if it costs me money.

Two issues with this assertion. As far as I know, individual teachers do not determine admission policies for their classes. The principal or board does.

The second issue is that having performance pay means you don’t want someone who has been a low achiever in your class. If the performance pay was based on what improvement you make to that student, then having ones that start from a low base could actually be an advantage over some know it all students who can’t improve on their alreeady high marks.

There is little point in teaching the less able kids if my pay packet depends on exam results. I’ll leave that to the idealistic first-year teachers who believe they can make a difference.

Who says performance pay will depend solely or even mainly on exam results. One could have a system where say the principal and board have 10% of the staffing budget flexible to be allocated to whichever teachers they think have performed best on the criteria that works for that school.

 I will focus exclusively on the exams. There is no point in teaching students about financial literacy and how to manage money if this is not going to improve their marks and my pay. Show me the money! I love incentives.

Here Peter has a stronger argument. A performance pay system could encourage teachers to teach for the exams only. But again performance pay doesn’t have to be about exams only.

Under merit pay I have a great opportunity to be one of the highest paid teachers in New Zealand. I will get my NCEA students to do endless resits of internal assessments until they get it right. I will make them rote learn the answers for the exam until they can repeat them in their sleep. Any student unable to perform this simple cognitive task will be withdrawn from sitting the exam to maintain my excellent pass rates. 

Again I am unsure that individual teachers can withdraw students from exams, or for that matter force resits for higher grades.

What I’d challenge Peter to come up with is what are the attributes that make a great teacher (as he seems to be) and how can they be recognised and even quantified, so that the great teachers are getting paid more than the not so great teachers.

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37 Responses to “Lyons on Merit Pay”

  1. m@tt (604 comments) says:

    Performance pay for MP’s. That’d be a better place to start.

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  2. Grendel (966 comments) says:

    what are the odds m@tt voted to keep MMP? FPP gave definite performance pay for MPs, dont perform get voted out. not under MMP though.

    but nice attempt to distract (as usual).

    whats sad about such a great teacher being so narrow minded is that he is basically saying, yep i am a great teacher who helps my students a lot, and you should pay me the same as the barely functioning guy who has just hung around long enough.

    who knew good teachers were such martyrs? or masochists?

    and hes probably a lefty, as his use of strawman is superb. i dont recall any discussion about performance pay being only based on exam results (or at all). sad really.

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  3. chrisw76 (85 comments) says:

    Incentives cut both ways of course. If I knew my teachers pay packet depended on my exam results I would be inclined to ask for a cut or threaten to make my pass mediocre. Of course I would do this two weeks before hand when any opportunity for counselling me to withdraw was gone.

    Cheers, Chris W.

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  4. jptucker (18 comments) says:

    What a let down…here I thought we had some really interesting feedback from a rational, or at least a non-hysterical, teacher…only to have that pipe dream crushed a short way in.

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  5. mikenmild (11,233 comments) says:

    lyons is just articulating what will happen in any system that tries to quantify ‘performance’. Teaching to the test, excluding non-performers from exams, reduced co-operation between teachers, etc, etc.

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  6. Than (439 comments) says:

    Peter’s argument is a strawman. His case doesn’t argue against performance pay, merely against certain flawed metrics of performance.

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  7. rouppe (932 comments) says:

    What an idiot. What he’s described isn’t merit. He’s described doing the minimum.

    Any principal worth the name would then be reviewing his performance as just “achieved” and putting his teaching under review.

    Merit is when you go way past the minimum required.

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  8. davidp (3,551 comments) says:

    Lyons apparently doesn’t have enough understanding of markets and human behaviour to concieve a useful system of performance targets and incentives for teachers. Should he really be teaching commerce?

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  9. mikenmild (11,233 comments) says:

    What Lyons is describing is the predictable reaction of teachers to the introduction of ‘performance’ pay.

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  10. Luc Hansen (4,573 comments) says:

    It appears that Lyons’ thesis just whizzed over the heads of DPF and his acolytes above, as they took his words at face value.

    Irony with your morning tea, anyone?

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  11. m@tt (604 comments) says:

    @Grendel. Bullshit to that.
    Parekura Horomia, voted in election after election after election. His performance is probably the worst of any MP. Where is his dis-incentive to be a waste of taxpayer money?

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  12. bhudson (4,736 comments) says:

    @mikey,

    Only if performance pay is based on a simple ‘pass’ result. If, as is far more likely, it combines elements of both year-on-year improvement for the individual students, and the prevalence of ‘excellence’ grades (with reference back to previous performance – which would ameliorate the complaint about teachers being punished for less capable students) then the ‘teach to the test’ argument would be mitigated as, while you can ‘teach to the test’ to achieve a simple ‘pass’, you can’t do so and impart the learning and understanding required to reach the higher grade.

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  13. SalParadise (54 comments) says:

    While satirical in nature, Peter Lyons piece does raise the rather hard to answer issue of how performance pay will be allocated.

    Giving a 10% flexible staffing budget to the principal and BOT does seem reasonable, however I imagine the variation in performance criteria would be huge.

    Plus should all subjects be open for performance pay or should we focus on the core subjects?

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  14. mikenmild (11,233 comments) says:

    Teacher quality alone will not raise student achievement and there is no evidence that performance pay does anything to improve student outcomes.
    Student achievement and teaching effectiveness can be undermined by many external factors, including previous schooling achievement, health, home environment and the amount of parental support. This makes tying teacher performance to measures of student achievement a very difficult thing.
    Overseas experience in ranking teachers according to student test measurements provides little confidence that New Zealand’s system would deliver the magic bullet that is desired.
    It would be especially bad if National Standards were basis for any performance pay system. The standards are inconsistent and are being implemented differently across the country. Using them to judge teacher performance would incorrectly label teachers along with kids.
    Performance pay is likely to affect the way teachers deal with more challenging students and would likely lead to ‘teaching to the test’, which puts narrow measures of achievement ahead of broader learning concerns.
    Why is the government bent on this flawed approach when we already spend comparatively less on teachers than other OECD countries yet achieve disproportionately better in recognised international measures?

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  15. dime (9,607 comments) says:

    Staff rooms around the country will be hilarious when this comes in.

    They will start to resemble cliques within their own schools – the slacker corner, the over achievers etc.

    If I was teaching I’d be pretty excited about this. I would be doing everything I could do become a better teacher, make sure I was paid the most and on the fast track to become a Principal. None of this who’s been here the longest crap for pay grades.

    Course, Id play the game too. At school id be a staunch unionist “isnt it shockign that they have forced me to earn more than you slackers.. i mean great teachers” heh

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  16. davidp (3,551 comments) says:

    mikenmild>Teacher quality alone will not raise student achievement

    If teacher quality doesn’t matter, then why do we bother to train them? Why not just hire any loser at minimum wage and set them loose?

    The arguments against teacher performance targets are just bizarre. Apply those to same arguments to computer programming, and you’d claim that programmers would only accept easy programming jobs rather than the really tough ones with companies like Microsoft and Apple. You’d claim that programmers would stop co-operating with each other. You’d claim that it would be impossible to come up with useful measures of programmer productivity or competence, except for some straw man such as “lines of code”. And you’d claim that programmers would bail out of any project that looked hard. None of these things are true in the programming world. But apparently teachers, alone out of all occupations, cannot have their performance measured or compensated.

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  17. Luc Hansen (4,573 comments) says:

    If I was teaching

    And where would your girl(s) with the dragon tattoo fit in this brave new (ethical) world of yours, Dime?

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  18. s.russell (1,578 comments) says:

    davidp,
    I was just composing exactly the same point in my mind when I read your post. Agree 100%: teacher quality is by far the single biggest factor in student achievement.

    The point about measurement is crucial of course. No-one with even half a brain would propose a system based merely on average results as that would be largely predetermined by who is put in the class. The challenge I think is less in working out who are the good teachers than coming up with an objective measurement.

    Every principal (hell, every student) knows who the good teachers are. But often this is subjective. How do you measure a teacher’s success in inspiring students to love learning, for example? (And yes, teaching to the test would be a real danger if it were not for the fact that this is already what many teachers do.) Therefore: performance pay should be discretionary: let the principal distribute the pot as he/she sees fit. That is more likely to see the cash go where it should than any “scientific” measurement.

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  19. mikenmild (11,233 comments) says:

    Could we also have your proposed performance measures for police officers, nurses and doctors, please?

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  20. Luc Hansen (4,573 comments) says:

    DPF’s closing sentence:

    What I’d challenge Peter to come up with is what are the attributes that make a great teacher (as he seems to be) and how can they be recognised and even quantified, so that the great teachers are getting paid more than the not so great teachers.

    Recommended reading for DPF would be “Visible Learning” by John Hattie and the many OECD reports on factors affecting student outcomes, including the influence of teachers.

    Hattie’s analysis has a great big hole in that he does not attempt to cover the field of socio-economic influence on outcomes, but the OECD does include that aspect, quite comprehensively, and determines that it is the biggest single factor in overall outcomes.

    Incidentally, the OECD rates NZ as having high socio-economic inequality, but our teachers also do well in overcoming that disadvantage, the best in the group rated as having high inequality.

    But, basically, this is all much ado about nothing. Principals already reward their favoured teachers (not necessarily the best performers because, as in any work environment, the stars are just as likely to get up the boss’s nose as to find favour, and not necessarily financially), and extending more discretion will only mean that if you want extra rewards, suck up to the boss.

    Furthermore, performance pay as this government sees it, is rewards, like a bottle of wine. Unless, of course, it decides to unilaterally reduce pay across the board for teachers and distribute the funds so released to a small clique of clever teacher-politicians.

    Now that would be a shit fight I would love to see!!

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  21. Psycho Milt (2,348 comments) says:

    …a system where say the principal and board have 10% of the staffing budget flexible to be allocated to whichever teachers they think have performed best…

    ie, the one performance pay system no workforce with any say in the matter will touch with a bargepole – the one where the boss dishes out performance pay to the people he likes. I realise that various Kiwiblog mouth-frothers would love to see the education system in turmoil for years while the govt engages in a war on teachers, but most of us with kids in school would frown on the idea.

    What I’d challenge Peter to come up with is what are the attributes that make a great teacher (as he seems to be) and how can they be recognised and even quantified, so that the great teachers are getting paid more than the not so great teachers.

    People usually would love to see complex, creative activities reduced down to a few simple metrics that they can understand. Sadly, physical reality often proves uncooperative with such endeavours and this is one of those cases.

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  22. slijmbal (1,223 comments) says:

    I come back to the fact an awful lot of large and small businesses manage to pay the better staff more than the worse. There are plenty of exceptions and issues including bad bosses, companies, over and under-promoted staff and certain unionised workplaces. But on the whole it works. Except for very specific industries where output is easily measured or where the job is highly incentivised (apologies to the English language on that one) e.g. sales then most review processes include a high level of subjectivity, also include gaining as many inputs as possible and include ‘soft’ measures.

    Any competent business knows about the problem of perverse outcomes through poorly formed incentives as satirised in Lyons’ article. He puts up a straw man to satirise really as no reasonable incentive process in the majority of professional services would be based on just the numbers especially the ones he uses. If the government did do such a process I would be 1st to argue against it.

    The logical conclusion of no pay rates based on ability and contribution is stated well above by davidp. The vast majority of professional services organisations somehow manage to pay better staff more on the whole. Why are teachers so special? And don’t say merit based pay does not have an effect, of course it does. Even Lyons the economist teacher agrees it does.

    In the small professional services company I used to be part owner/director of we would get written input from colleagues, managers, key customers and the reviewee. We deliberately did not use chargeable hours as the only mechanism to measure performance as it detracted from team supporting and infrastructural tasks and had perverse outcomes. We wanted the staff doing the best for them and us and not being pushed to ‘game’ the system through financial pressures. Target measures included soft and hard measures and we would take in to account that circumstances changed and targets may need to be adjusted. These measures also included what the company needed to do for the employee.

    Common sense really.

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  23. trout (916 comments) says:

    @MM police.doctors and nurses do receive performance related pay – 2 ways – by promotion or by way of mobility – (limited opportunities for Police of course but they have options within the force). Nuses and doctors can receive appropriate reward for skills in the market. Not so teachers – they have ( excepting for private schools) created a closed shop where they have a large measure of control over wages and conditions. Many very good teachers leave the state system because they do not feel valued – a consequence of paying for service rather than ability. But then again. your brand of socialism is designed to make things lousy for everybody.

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  24. barry (1,317 comments) says:

    Performance pay for teachers is easy – and it has nothing to do if the kids are smart or dumb.

    The method is to test the children at the start of each year (as they all are at the moment – every student is supposed to be rated several times a year – I know some schools and teachers dont do this because they think its wrong – but theyve never worked in the real world !!)

    It matters not if the pupil is up to date , or ahead, or behind – the important thing is that by years end the pupil has improved by 1 year – using the tests they already use.

    Yes – it will require ranking of students into classes of various levels – but most schools do that now because if you dont you have to run the class for the slowest student – and you cant do that – its simply unfair on the faster students.
    And it will also help direct students into subjects that they are good at rather than ones they cant handle. It will also put a stop to lazy credits – at the moment its really easy to get credits in the arts subjects – because in many of them you cant be wrong. Things like drama and dance are really pretty useless but they are courses that have easy credits.

    Now – come end of year the teacher(s) that havent raised their class by a year are rated down, those that have done a year improvement are rated good (or satisfactory) and those that have done better than a year are rated superior.

    It will take a year or two to settle down. Superior teachers will need to spread what they teach so that the classes dont get too far ahead – because if the following year they go to a not so good teacher they fall behind – so superior teachers will end up teaching a wider range so that their classes get more information and ability into their heads.
    Inferior teachers will have to shape up or ship out. – and in the primary area its estimated that at least 30% of teachers are inferior – which explains why some many students get to secondary school 2 or 3 years behind where they should be.

    Performance pay will have the biggest impact on the whole poulation in the primary schools. Its too late to try to get students up to speed at secondary school.

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  25. barry (1,317 comments) says:

    Almost forgot – we hear lots of comments about inspirational teachers and how do we measure that, etc.
    With over 30% of the population unable to proceed through a forklift drivers exam (its simple) then basic literacy is the countries biggest challenge. Thats go to be sorted urgently.

    Inspirational teachers are superior teachers, they will always have their classes racing along – so there’s no problem indentifying them.
    And if you want a mess you leave to identification of good teachers up to the principal and the board.
    The principal in most schools got their by politics – they are not good managers – they are probably good teachers and they all have followers and sycophants in the school. And board members are almost universally ill-equipt to identify good teachers – God help us if its left to boards.

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  26. Harriet (4,614 comments) says:

    Kids in private schools mostly teach themselves – so going by Lyon’s reasoning – mum and dad should get some money back if exams are passed.

    Then in the near future the quallity of education could be continuly raised, along with the fees and the refunds.Now that’s what you would call productivity based on merit, or in old teacher speak, it would be called ‘discipline’.

    Well, that’s about as good as you’ll ever get with merit based education and economics, and you would of course know all that if you paid attention at school.Lyons obviously didn’t.

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  27. lastmanstanding (1,233 comments) says:

    Some random points

    1. Any system can be gamed. There aint one thats been invented that cant be.
    2. One size dont fit all. Horses for courses.
    3. Most students want to succeed rather than fail.
    4. Most teachers want to get the best out of their students.
    5. Most parents want the best for their kids.
    6. A good Principal will the best person to design a performance system that works for their teachers
    7. Annual performanec reviews are like getting hold of your dog and beating it for all the times its pissed on the carpet in teh last 12 months.
    8. Constant continual performance review with known transperant rules of engagement work best.

    I could go on and on but after 40 years of being performance reviewed and reviewing more people than most have had hot dinner you get the picture.

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  28. Psycho Milt (2,348 comments) says:

    It matters not if the pupil is up to date , or ahead, or behind – the important thing is that by years end the pupil has improved by 1 year – using the tests they already use.

    Sure. Now:

    1. Picture the negotiations regarding the definition of a year’s improvement and the fitness of those tests for purpose once you change the purpose to deciding how much teachers should get paid. Still looking simple?

    2. Successive NZ govts have spent decades creating an underclass that’s energetically producing kids who have foetal alcohol syndrome and come to school hungry, tired and suffering the psychological effects of neglect and abuse. Your task as a teacher in a decile 1 school is to take this unpromising material the state has delivered you and raise it through the prescribed one year’s worth of educational improvement – if you don’t want to be labelled a crap teacher and watch others rise through the ranks ahead of you, that is. Unintended consequences? Up the wazoo…

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  29. Mark (1,406 comments) says:

    Formulating an objective set of performance indicators that does not screw the system to one of teaching to tests is the most difficult aspect of this.

    The problem with PPF’s proposal of holding 10% for bonuses is that where a school has a high number of outstanding teachers they will get less performance pay than a school with a higher number of poor teachers and a more imbalanced allocation of the 10% of the pay.

    I struggle to see how they are going come up with a system that can be consistently applied from school to school. They have failed in this respect with national standards and will fail with this.

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  30. Monique Watson (1,062 comments) says:

    Spanking a donkey doesn’t make it go faster. It’s a donkey not a thoroughbred. However donkeys have been a valuable part of the ascent of human civilization:
    Donkeys have a notorious reputation for stubbornness, but this has been attributed to a much stronger sense of “self preservation” than exhibited by horses.[18] Likely based on a stronger prey instinct and a weaker connection with man, it is considerably more difficult to force or frighten a donkey into doing something it perceives to be dangerous for whatever reason. Once a person has earned their confidence they can be willing and companionable partners and very dependable in work.
    Although formal studies of their behaviour and cognition are rather limited, donkeys appear to be quite intelligent, cautious, friendly, playful, and eager to learn. Wikipedia.

    Give me a donkey for a teacher any day. My son has a thoroughbred for a teacher in second grade at Middle America Elementary. The wee bitch sent round the following email:

    Charisma to Parents:
    Hi Parents,
    I know that it is the end of the year and that the children have been focusing on their biography reports, but the scores in our timed tests have taken a dramatic decline.
    Practicing addition and subtraction facts need to be done nightly, even if its only for 5 min or less. I know this is a part of homework that gets pushed aside, but it is very important.
    Practicing math fact fluency keeps children sharp over the summer and they should continue to practice daily…trust me if will help they start 3rd grade out ahead of the game.

    That sounds rational. Right? The Craaazy is in the detail. They get tested everyday. EVERYDAY!. Not the intermittent PAT or STAR tests or even periodic tests against some kind of Standards EVERY FUCKIN Day they are plonked down and tested and a lot of time is given over to this instead of real learning. They get one hour of homework a night. Seven and eight year olds.
    My son has been told he is a “slow” reader because he doesn’t respond properly to her grilling.
    He doesn’t respond properly because she is transmitting from Planet Craaazy. She has no idea of how to teach boys. He’s reading T.S. Eliot and Raymond E. Feist so he’s doing just fine. But she would never know what his strengths are or that he his gifted because she doesn’t give a shit. He’s the disruptive kid who ruins her “targets” for amount of completed homework.
    Performance pay means more testing and less teaching.
    Scares the guys off teaching too.

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  31. HB (292 comments) says:

    There is no evidence that performance pay for teachers will improve student outcomes

    Stop promoting your ideologies like they are facts. They are not.

    Repeating it continuously while ignoring this is starting to make you look like a liar.

    Teacher quality is, unfortunately, not the single biggest factor in student achievement.
    Not even close.
    Socio-economic factors are by far.

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  32. HB (292 comments) says:

    My daughter attends an intermediate.
    Her teacher is good, I have no issues there.
    the management at the school are bloody useless though. For example, not supporting classroom teachers in disciplining students which means a student who has continuously displayed unacceptable behaviour (including swearing at the teacher, assault, bullying etc) is still in class with little consequence (a bit of fluffing around with a RTLB). In my opinion he should have been suspended to the board. They could have then either excluded the kid or continued his enrolment with conditions (for example, anger management course, lunchtime withdrawal until behaviour improves).
    Instead he continues to interrupt the teaching and learning in class. This will affect progress of others in class.
    How is that fair on the teacher?

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  33. HB (292 comments) says:

    In case my comments are misconstrued…
    I just want to point out that I am all in favour of improving teacher quality.
    I just think we should use an evidence-based approach to ensure that any changes made will improve student outcomes.
    There is no evidence that performance pay for teachers improves student outcomes

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  34. Mary Rose (393 comments) says:

    >His case doesn’t argue against performance pay, merely against certain flawed metrics of performance.

    Wild guess: that’s what he meant to do.

    >What Lyons is describing is the predictable reaction of teachers to the introduction of ‘performance’ pay.

    Yup. I think Lyons very much understands human nature.

    >While satirical in nature, Peter Lyons piece does raise the rather hard to answer issue of how performance pay will be allocated.

    Exactly.

    mikenmild>Teacher quality alone will not raise student achievement
    >>If teacher quality doesn’t matter,

    MM didn’t say it didn’t matter. He said it wasn’t the ONLY thing that mattered

    Some kids just haven’t got the grey matter to achieve anything. Others fail because they see no point in learning and their parents don’t either.

    There are poor and lazy teachers out there. Clearly, that’s very bad.
    Doesn’t performance-related pay suggest you’d be ok with continuing to employ them,?
    Another possible unintended consequence: poor teachers would be a lot cheaper to employ than good ones.

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  35. Nookin (3,157 comments) says:

    Performance pay is not just about money. The system involves defining good teaching practices in specific circumstances and how to improve existing teaching practices in order to achieve the higher standards. Performance pay is a carrot along with the professional satisfaction of seeing results. It provides a little bit of incentive. The main thing, however, is the focus on achievement.

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  36. slijmbal (1,223 comments) says:

    Incentives don’t work for teachers but surprisingly work for the rest of the planet blah blah blah …….

    Teachers could never be measured but it’s done for lots of other professions of much more complexity blah blah blah …..

    Teacher quality is not a large influence for student outcomes but we puport NZ has one of the best outcomes in the world therefore we have best system in the world and great teachers blah blah blah ……

    Logic free zone

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  37. barry (1,317 comments) says:

    Golly – with all the excuses listed here about why we should allow useless teachers I could write a very long book with them.

    Why is it that the education sector is full of reason why we cant do things – but never has any good ideas about how we can improve things. Well thats not true actually. They have had some ideas…..
    The idea about smaller classes doesnt work.
    the idea about removing real punishments doesnt work
    the idea that distruptive students have the right to disrupt others doesnt work (ie: they have to stay in the classroom).
    The idea that we shouldnt have real testing doesnt work (with the old school cert system we separated people who could be rocket scientist and those who would be good electrcians – these days its everyone off to university – get a big loan and no job)
    etc.

    what most seem to forget is that performance pay will force lots of other changes. Teachers will start to put real pressure on the system to start controlling disruptive kids, teachers will start to more attention to ensuring the basics are taught before they drag the kids off to kelly tarltons etc (and in lower decile school the parents often cant afford these trips that take kids out of the classroom before they should). Techers will start to demand correct resources to help – rather than such things as interactive white boards, etc, etc.

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