The effects of performance based pay on teacher motivation and student outcomes

A large urban charter school in Los Angeles, California, has implemented a non-traditional method of paying teachers through performance-based pay. Since its inception in 1998 (Odden Kelly, 2002), the teachers' bonus pay was directly linked to an evaluation of their skills and knowledge. During this time, the school demonstrated increased student achievement (Kellor, 2005). However, at the start of the school year 2010-2011, this very complicated evaluation process repositioned bonus monies to add a component that awarded bonuses for student assessment results. The bonuses for student results changed the dynamics of the evaluation system and many teachers voiced their concerns. This mixed-method study explored the teachers' perceptions of the performance-based pay system. This study investigated the effect such a system has on teacher motivation using Vroom's Expectancy Theory of Motivation (Vroom, 1964); one of the most commonly used theories in work motivation. This research also gave voice to the teachers involved in this very complex evaluation system through the qualitative data collected. Results indicated that teachers understand the evaluation system process and in particular they positively responded to the pieces of the assessment that provide teachers with the most growth in their professional practice. Regarding the Vroom's Expectancy Theory, results demonstrated that teachers have high levels of expectancy indicating that they believe their work provided them with the results they expected. Results also showed that teachers had high levels of instrumentality indicating that teachers are motivated by their accomplishments and feelings of self-efficacy, and personal growth. They were less motivated by extrinsic rewards including the monetary compensation or opportunities for advancement or promotions. Results of the Valence Construct suggested that teachers valued the opportunity to improve their teaching skills through meaningful professional development. Results revealed that teachers are not necessarily averse to receiving a monetary compensation, but the negative reaction is more indicative of the belief that the local school districts pay teachers a higher salary. The teachers have a strong perception that they receive a lesser pay for the same amount of work compounded by the additional stress factors attached to this program. In summary, the performance-based pay system at this school has been reviewed and has developed over time in congruence with the school's own development and growth. The results of this study conclude that the effects on teacher motivation are positively aligned to the feedback and direction provided by their peers and administrators and negatively aligned with the existing bonus structure, specifically with the monetary rewards attached to student outcomes.