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Performance pay for teachers: Determinants and consequences

  • Belfield, Clive R.
  • Heywood, John S.

Theory and evidence on performance-related pay for teaching remain inconclusive. Teachers will respond to rewards, but an appropriate reward structure may not be devised because education is a collaborative endeavor. Here we test three hypotheses: performance-related pay among teachers is more likely to be observed when there are evident indicators of team production; teachers receiving performance pay will earn more in total than otherwise equal teachers without performance pay; and teachers receiving performance pay should have higher job satisfaction. We use the Schools and Staffing Survey (2000) to test each hypothesis. Team production does strongly predict performance-related pay, and that such pay does boost earnings, but that job satisfaction is lower for those who receive such pay awards.

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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 27 (2008)
Issue (Month): 3 (June)
Pages: 243-252

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Handle: RePEc:eee:ecoedu:v:27:y:2008:i:3:p:243-252
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  1. Goldin, Claudia, 1986. "Monitoring Costs and Occupational Segregation by Sex: A Historical Analysis," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 1-27, January.
  2. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
  3. Clark, Andrew E & Oswald, Andrew J, 1993. "Satisfaction and Comparison Income," Economics Discussion Papers 10018, University of Essex, Department of Economics.
  4. Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
  5. John S. Heywood & Uwe Jirjahn, 2002. "Payment Schemes and Gender in Germany," ILR Review, Cornell University, ILR School, vol. 56(1), pages 44-64, October.
  6. Ballou, Dale, 2001. "Pay for performance in public and private schools," Economics of Education Review, Elsevier, vol. 20(1), pages 51-61, February.
  7. Booth, Alison L & Frank, Jeff, 1999. "Earnings, Productivity, and Performance-Related Pay," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 447-63, July.
  8. Sarah Brown & John G. Sessions, 2003. "Attitudes, Expectations and Sharing," LABOUR, CEIS, vol. 17(4), pages 543-569, December.
  9. Michelle Brown, 2001. "Unequal Pay, Unequal Responses? Pay Referents and their Implications for Pay Level Satisfaction," Journal of Management Studies, Wiley Blackwell, vol. 38(6), pages 879-886, 09.
  10. Thomas S. Dee & Benjamin J. Keys, 2004. "Does merit pay reward good teachers? Evidence from a randomized experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 471-488.
  11. Bruce Shearer, 2004. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment," Review of Economic Studies, Oxford University Press, vol. 71(2), pages 513-534.
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