Congress, Teachers, and the Perils of Merit Pay


Catherine Lugg, Ph.D


Center for Education Research, Analysis, and Innovation
School of Education
University of Wisconsin-Milwaukee
PO Box 413
Milwaukee WI 53201


May 18, 2001





Congress recently proposed a bill ostensiblyaimed at improving the quality of the teacher corps. Instead, the bill may verywell complicate and endanger educational reform measures across the nation.House Resolution 949, or the "Measures to Encourage Results in TeachingAct of 2001," proposes to establish a system of national teacher testingand merit pay for all public school teachers. The bill has three aims:

(1) To provide incentives for States toestablish and administer periodic teacher testing and merit pay programs forelementary school and secondary school teachers.

(2) To encourage States to establish meritpay programs that have a significant impact on teacher salary scales.

(3) To encourage programs that recognize andreward the best teachers, and encourage those teachers that need to do better.[1]

At first glance the bill appears to bewell-intentioned, with its focus on improving weaker teachers and rewardingoutstanding ones. Numerous problems, however, emerge once the content of thebill is examined against what is known about teacher testing and merit pay.

If implemented, the bill would impose acrushing fiscal burden on states and local communities, many of which arealready facing overwhelming budgetary pressures. The bill might also greatlycomplicate labor relations between school districts and their teachers at atime when both sides are working more collaboratively and constructively tofoster better educational outcomes for the nation's students. And finally, thebill has the potential to limit the decision-making power of states and localcommunities in recruiting, hiring, retaining, and rewarding teachers.

The Problems with Teacher Testing

Currently, 41 states require candidates forteacher certification to achieve certain scores on either their own assessment,such as the controversial Massachusetts exam (MTT/MECS), or a set of nationalmeasures, such as Educational Testing Service's generally well-regarded Praxisseries. Without a passing score on the test that a state designates,prospective teachers are barred from teaching in public schools. Yetentry-level teacher testing has been problematic. There are numerous historicalexamples of biased test construction. These tests have tended toeliminate competent teachers along lines of race, class and ethnicity.Additionally, issues of poor test construction have disqualifiedsimilarly competent teachers, regardless of background. Badly designed testquestions have yielded a validity that is weak or non-existent. In other words,many of these tests haven't measured what they were supposed to measure. [2]These issues can be somewhat ameliorated with improved testing technology. Butwith policy makers and teachers heeding the intense political pressure forgreater educational accountability, these entry-level tests have become thenorm for initial teacher certification, notwithstanding their deficiencies.

Because of technical difficulties, costs oftest development, and most importantly, possible legal liabilities, states havelargely refrained from routinely testing teachers after their initialcertification. As government employees, certified public school teachers whohave earned tenure have due-process rights.[3]Decertifying a teacher presents significant legal complexities. Even whendistricts and the state have just cause (such as insubordination, grossincompetence, a danger to children, etc.), the process is daunting. The legalcomplexities of decertification, and the likely resulting litigation, woulddramatically increase if maintaining certification were contingent upon passinga test every three to five years - especially a test that may very well beinvalid. Consequently, as with other professionals (lawyers, doctors, socialworkers, etc.), states and communities rely on continuing, and locally based,professional development, supervision and evaluation to enhance the skills ofthe teacher corps.

HR 949 concedes that extensive,comprehensive and periodic teacher testing may not be particularly popular withthe states. Hence, the actual intent of the proposed legislation is found inthe last section of the bill, which allows states to by-pass the testing planand go directly to devising merit pay plans.

(a) IN GENERAL- Notwithstanding any otherprovision of law, a State may use Federal education funds--

  1. to carry out a test of each elementary school or secondary school teacher in the State with respect to the subjects taught by the teacher; or
  2. to establish a merit pay program for the teachers.

Here is where the real purpose of HR 949 isfinally revealed: A national system of merit pay, whether local schoolauthorities wish to implement it or not.

The Problems with Merit Pay

In one form or another, merit pay plans haveexisted in the public sector for almost 20 years, and the research regardingtheir dubious efficacy is well established. [4]Merit pay is extremely common in business, yet it has it detractors, mostnotably the late W. Edwards Deming, the father of Total Quality Management.Deming called merit pay the "deadly disease" of management because itfocused on individual performance, not on the quality of a work team. [5]

Nevertheless, would-be educational reformershave touted various merit pay plans as a means of boosting teacher performance,and ultimately, student achievement. Proponents of merit pay claim that thetraditional salary schedule, which rewards teachers for graduate creditsearned, extra duties such as coaching and advising, and years in service,punished high performing teachers while protecting teachers who are lazy,incompetent, or both. The argument is that the traditional salary schedulegives almost every teacher a boost in pay through sheer longevity. It isalleged that teachers have little incentive to improve their professionalcompetence.

Merit pay gained a policy foothold in U.S.public schools during the 1980s, when political pressure was brought to bear inthe areas of teacher productivity and student academic performance. However, traditionalmerit pay plans have been poorly designed, and teachers have had little or noinput regarding the process. Furthermore, merit plans do not recognize thecooperative and collegial aspects of teachers' work. The collaborative cultureof teaching is critical for successful school reform, and merit pay plans tendto corrode this intrinsic feature of effective schooling.[6]Furthermore, merit pay plans can complicate and thwart other educationalreforms that depend upon teacher participation, involvement and enthusiasm.

Particularly problematic are merit pay plansthat reward only a few individual teachers, pitting each teacher against everyother teacher, in pursuit of a limited, and typically under-funded, bonus pool.In some of cases, merit pay can be a Trojan horse that carries and legitimizeswidespread pay cuts.[7] Such plans can intensify frictionbetween teachers and the school district and occasionally trigger job actionsand teacher strikes.

Besides the corrosive effects of competitionon teacher morale, teachers report that administrative evaluations are ofteninadequate and biased. In many areas, receiving merit pay depends more on theteacher's relationship with the individual evaluator (and the evaluator's owninstructional competence) than on the teacher's actual pedagogical prowess. Asteacher Jerry Jesness relates:

A teacher of the deaf lost out because ofa poor evaluation by an administrator who could not understand American Sign Language.A science teacher who later left teaching to become an engineer and now hasseveral patents to his credit received a dismal evaluation from an ex-coachturned principal who had no idea what the science teacher was talking about. Mypoorest appraisal in recent years came from a monolingual speaker of Englishwho observed me teaching a Spanish reading class in which neither my studentsnor I spoke any English.[8]

Finally, there is virtually no evidence thatmerit pay plans actually improved student academic achievement. On thecontrary, the clearest evidence indicates that merit pay is in fact detrimentalto the workplace of teachers. One consequence of poor teacher morale is what iscalled "weak school culture" - a school that is not focused onstudent learning. This can be devastating for student achievement.[9]Traditional merit pay plans tend to interfere with alternative and simultaneousefforts aimed at boosting student performance, and so they may actually thwarteducational reforms.

The flaws in HR 949

The proponents of the "Measures toEncourage Results in Teaching Act of 2001" seem strangely na´ve. Theywould appear to have ignored the failed record of merit pay. Also, their billseems to be a striking case of federal overreach. The proposed bill has thepotential to overturn or hopelessly complicate thousands of collectivebargaining agreements between local school districts and their teachers.Furthermore, it represents another under-funded federal mandate that shifts thefiscal and implementation burdens to the states and local communities. For aCongress that has consistently stressed the importance of local control ineducational matters, this bill is an incongruous way of demonstrating thatcommitment.

Moreover, the proposed merit pay system isnot particularly viable when the costs for implementing and maintaining such anextensive regime of testing are considered. The bill allows for a maximum of$600,000,000 to cover the costs of both the testing requirement and merit payplan. This means that states and Washington, DC would each receive roughly$11.7 million to implement merit pay (mandatory) and testing plans (optional).In the larger world of educational finance, this is small change indeed. Bycontrast, when the state of Iowa was debating a possible merit pay plan duringDecember of 2000, the first year costs were projected to run between $50 and$60 million for that state alone. [10]

How could $11.7 million in federal largesseplay out at the state level? Continuing with the Iowa example, one could arguethat given that state's long standing record of educational success, everysingle public school teacher is entitled to merit pay. Using the heroic assumptionthat there are no transaction or administrative costs in implementing thefederal merit pay program, each Iowa public school teacher could expect toreceive a whopping $354.54 from Uncle Sam (before taxes) for their efforts.

For merit pay to be financially meaningfulin states with larger teacher populations (Iowa is a small state), monies fromboth the state and local treasuries would be needed. In large states likeTexas, California, and New York, HR 949 has the potential to dramatically raiseeducational costs while doing nothing to improve either teacher quality orstudent achievement. Additionally, the administrative and legal costs have thepotential to be quite formidable, particularly in areas with strong laborunions that are willing to ensure that these plans adhere to long-establishedcollective bargaining agreements.


In the final analysis, the "Measures toEncourage Results in Teaching Act of 2001" is an odd and ill-conceivedpiece of educational legislation. It has the potential to involve the federalgovernment in every local school districts' hiring, evaluating and rewarding ofteachers, while sticking states and local communities with most of the bill andlegal headaches. With its central focus on merit pay, this legislation couldalso undermine teacher morale, and thus thwart local and state educationalreform efforts targeting greater student achievement. In an era of educationalaccountability, this proposed educational bill fails to make the grade.


1. This bill would amend Title II of theElementary and Secondary Education Act of 1965 (20 U.S.C. 6601 et seq)

2. See:

Walt Haney, Clarke Fowler,Anne Wheelock, Damian Bebell and Nicole Malec, "Less Truth Than Error? Anindependent study of the Massachusetts Teacher Tests," EducationalPolicy Analysis Archives, Volume 7 Number 4, February 11, 1999.
Available at:;

Richardson v. Lamar CountyBd. of Educ. 729 F. Supp 806, M. D. Ala. 1989 Scott Baker, "An AmericanDilemma: Teachers Testing and School Desegregation in the South," in WayneJ. Urban ed., Essays in Twentieth-century Southern Education: Exceptionalismand Its Limits, New York: Garland, 1999, pp. 163-198

Janet Duff Carson,"Legal Issues in Standard Setting for Licensure and Certification,"in Gregory J. Cizek, Setting Performance Standards, Mahwah, NJ: Erlbaum,2001, pp. 427-444.

3. Mark C. Yudof, David L. Kirp, andBesty Levin, Educational Policy and the Law, 3rd edition. St. Paul, MN: WestPublishing, 1992, 334-335.

4. See:

Helen F. Ladd,"Catalysts for learning: Recognition and reward programs in the publicschools," The Brookings Review, Volume 14, Number 3, Summer 1996

John R Deckop and Carol CCirka, "The risk and reward of a double-edged sword: Effects of a meritpay program on intrinsic motivation," Nonprofit and Voluntary SectorQuarterly, Volume 29, Number 3, September 2000, pp. 400-418

James L. Perry, Beth AnnPetrakis, and Theodore K. Miller, "Federal Merit Pay, Round II: AnAnalysis Of The Performance," Public Administration Review, Volume49, Number 1, Jan/Feb 1989, pp. 29-37.

5. Howard Rischer, "Merit pay canbe a hard sell," PM. Public Management, Volume 81, Number 7,July/August 1999, pp. 8-13.

6. Carolyn Kelley and Allan Odden, ReinventingTeacher Compensation Systems, Washington, DC: CPRE, September 1995.
Available at.

See also:

Richard J. Murnane and DavidK. Cohen, "Merit pay and the evaluation problem: Why most merit pay plansfail and a few survive." Harvard Educational Review, Volume 56,Number l, February 1986, pp. 1-17. Ladd, op. cit.

7. Joanna Richardson, "Va. DistrictKills Program Tying Teacher Pay to Merit," Education Week, March 24, 1993.
Available at:

8. Jerry Jesness, "Teacher MeritPay," Education Week, April 4, 2001.
Available at:

9. Stuart C Smith and Phillip K. Pile, EducationalLeadership: Handbook for Excellence, 3rd ed. Oregon: ERIC, 1996

Terrence E. Deal and Kent D.Peterson, Shaping School Culture: The Heart of Leadership, SanFrancisco: Jossey-Bass, 1998

10. Jonathan Roos, "Teacher payfight expected to last months," The Des Moines Register, December26, 2000.
Available at: