Term Paper on "Pay for Performance"

Term Paper 7 pages (2275 words) Sources: 1+

[EXCERPT] . . . .

Pay for performance, or alternately referred to as 'merit pay' is a system in which financial incentive is used to elicit certain levels of performance.

This system of pay has been used in the educational system for nearly 300 years, and saw a strong revival in the 1980s (Gratz, 2005). The definition of pay for performance changes with the definer and their needs.

This paper overviews pay for performance systems. It discusses the advantages and disadvantages of such a system. The effectiveness of pay for performance in the Denver pilot program is overviewed. The relevant considerations for implementing the system is detailed, as well as a brief overview of employee communications. and, in the end, the anticipated impact of the pay for performance impact on the district is discussed.

Pay for Performance in Public Schools

Overview of Pay for Performance:

Pay for performance, or alternately referred to as 'merit pay' is a system in which financial incentive is used to elicit certain levels of performance.

This system of pay has been used in the educational system for nearly 300 years, and saw a strong revival in the 1980s (Gratz, 2005). The definition of pay for performance changes with the definer and their needs.

No uniform definition of pay for performance exists, even within the confines of the educational arena. Despite this fluid nature of the definition of pay for performance, the general meaning is a system where merit is determined by a supervisor, of a worker, and performance is arranged to be a more objective measurement. In many pay for performance syste

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ms, in the educational system, both merit and performance are determined by the administration of a test.

These tests can be either a testing of the teacher being evaluated, to demonstrate their personal skill and knowledge, or it can be a testing of the student, to mark their achievement (Gratz, 2005). Recently, the testing of the students to determine the effectiveness of their teachers has become the most predominant method of performance assessment. The No Child Left Behind Act has supported this.

In the early 1700s, teachers' salaries, in certain areas in England, were linked directly with their students' scores on examinations in reading, writing and arithmetic. By the mid-19th century, this practice of linking teachers' salaries with student performance had been incorporated into the English education system as part of the Revised Education Code, enacted in 1862 (Gratz, 2005). From this, the pay for performance system would see its first, of several, surges in popularity.

During the next three decades, the pay for performance system grew more and more complex. "Merit grants" were issued for greater efficiency and expansion of the subjects that were being taught and tested. Bureaucracy grew significantly, thanks to the implementation of this system. Inspectors became a part of the educational system, and examiners, who reviewed the inspection reports, also added another layer to the educational bureaucracy. Because of the increasing bureaucracy, teachers came under intense pressure, as journals from this time in history indicate. This pressure led to the over pressuring of students to ensure that they would meet or surpass the standards needed for the teachers to receive a favorable assessment (Gratz, 2005).

During this era, upper-class politicians favored this system of compensation. They saw it as a method for restricting the learning of the common class. Robert Lowe, Education Minister, and a supporter of the pay for performance system, noted that it would at the very least reduce costs. He stated, "If it is not cheap, it shall be efficient; if it is not efficient, it will be cheap" (as cited in Gratz, 2005). However, Lowe's opinion would not be the mainstream opinion, only a few short years later.

By 1904, the Board of Education changed their pay policy for teachers. They indicated that teachers were charged with assisting children to learn. They also encouraged each teacher to use their best methods of teaching, unique to the needs and conditions of their students. The Board felt that teachers should definitely continue to test their students, but that that it was unreasonable to assume that a child would be able to keep at the call of his memory (Gratz, 2005). As such the single salary system came into favor, and would be as such for many more decades.

Nation at Risk, put forth in the mid-1980s, opened up the United States, once again to their struggling school systems. It recommended that teachers' compensation be switched to a performance-based system, with backing on President Reagan. This new system rewarded teachers' dependant on supervisor reviews (Gratz, 2005).

This system had the right idea, of the effectiveness and efficiency that can be had with pay for performance, however it made the system too subjective to ensure fairness. Today, pay for performance has been revitalized to almost a human resources mantra. It is now most commonly found as a system of extra compensation for achieving certain pre-determined criteria. In education, this is currently most often seen as being in conjunction with higher student test scores, much like the system from the 18th and 19th century.

Potential Advantages to Pay for Performance:

One of the most significant pay for performance advantages is that those teachers who truly excel at their profession can be awarded as such. Merit pay systems allows for monetary awards to be given to individual teachers, those who deserve it. Of course, in some instances, an entire school has to obtain a specified goal before an award is given, and then the school disburses the money as they see fit, but for the purposes of this paper, this plan discusses individual pay for performance systems.

Pay for performance allows for a specified, quantifiable level of accountability. Measurable goals that are put into place, holds teachers accountable for their actions in the classroom. This measurement of accountability can also serve as a motivator as well. It should motivate teachers to not only do their absolute best, but also to improve their teaching skills. This would then lead to a trickle down effect where better skilled teachers would naturally lead to students with higher test scores, and eventually better schools overall.

Pay for performance could do away with the desire for vouchers. With motivated and monitored teachers, pay for performance systems should lead to improved schools, across the board, as noted above. Improved public education would lead to the less likelihood of parents wanting to utilize school vouchers.

Potential Disadvantages of Pay for Performance:

In some instances, current educational systems have not tied their performance objectives with student achievement. Instead, they based their performance requirements on items that are less quantifiable and more subjective, such as education experience of the teacher, peer review of the teacher, perceived leadership, family feedback, and whether or not the teacher had skills in the areas that the school needs. The problem in this lies in the subjectivity. A teacher could provide excellent results when it comes to instilling knowledge in her students, but not be well liked by her peers. This could lead to an inability to attain these extra monetary incentives. The profession becomes more of a popularity contest, rather than a true measurement of skill as an educator. It could also be administered unfairly, which would be counterproductive as a motivator for enhanced performance.

In addition, giving monetary rewards for performance that should be achieved can redirect limited resources from other areas that may yield even higher levels of performance, for the teacher. This includes additional training for the teachers, or classroom resources. These may be more effective than the merit pay system.

Perhaps the most significant disadvantage of the pay for performance system is the possibility that teachers will simply teach to the test. In an effort to obtain the highest test scores possible, teachers may be tempted to simply teach their students the specifics of the test. This sort of narrow teaching is a significant detriment to students as they progress through the public educational system and into areas of higher learning and eventually into the real world.

Effectiveness of Pay for Performance in Denver School District:

Denver ran a Pay for Performance pilot program that was administered jointly by the district and the teacher association. The pilot program was implemented and reviewed and revealed significant improvements in the district. These improvements were shown in aggregate student achievement, as well as the opinions of the participants in the pilot program. However, they found that these improvements were not due to tying financial incentives to student results. They found that a strict pay for performance system, based solely on student achievement, is an inappropriate model for public education as it encouraged counterproductive, and sometimes unscrupulous behavior. They found that tying student achievement to teacher performance led to reverse incentives and negative consequences for everyone involved. (Gratz, 2005).

Teachers came on board quite quickly. They saw the pilot as getting paid extra for something they already did. They had been setting goals anyways, so this simply added a… READ MORE

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Quoted Instructions for "Pay for Performance" Assignment:

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In your proposal, provide a discussion of potential advantages and disadvantages in general and specific to your organization. Your proposal should describe relevant considerations in implementation and a brief plan for employee communication. Please include information about the effectiveness of these plans at other organizations, including any impact (expected and unexpected) on HR outcomes and costs. Your proposal should demonstrate an understanding of the interrelationships among all HR sub-functions as well as the strategic advantages of implementation within your organization. Your paper should contain a minimum of 5 relevant peer-reviewed/scholarly resources

Begin with a detailed summary of the best practice, including any information on usage across similar organizations and research on its effectiveness/impact. Your proposal must review current research related to this practice. Based on your research, discuss potential advantages and disadvantages to implementation of this program/trend at your organization? In particular, be certain you relate to the organization’s strategic objectives, HR mission and other HR sub-functions impacted by this proposed program.

Describe how these issues/trends might impact your organization? Do you see this information impacting current HR policies or programs at your organization? How so? Why are you recommending this program? What specific organizational level and HR objectives can be impacted by including this item in your organization’s HR policies? Under what conditions would you favor use of this approach? What concerns would you have about this approach given your organization’s strategic objectives? Under what circumstances would this best practice be inappropriate for your organization and/or some of the occupations within the organization?

HRM 590 Week 5 Rubric

Criterion

Unsatisfactory

Satisfactory

Exceptional

Peer-Reviewed Academic Sources

Included fewer than three sources. Or, sources were out-of-date, not peer-reviewed, not relevant or not integrated well.

Included three relevant, recent, peer-reviewed sources that are integrated.

In addition of meeting requirement of satisfactory, included additional relevant, recent, peer-reviewed sources that add value to the arguments being presented.

Presentation

Organization/Mechanics

Paper lacks organization, contains errors.

Organization, Grammar, Readability and Style are free of errors and presented at the graduate level.

Higher Order Thinking

Limited integration and application of concepts and theories introduced in required readings and newsgroups. Bulk of presentation is anecdotal and descriptive.

Compares/contrasts/integrates theory/subject matter with work environment/experience

Analyzes and synthesizes theory & /practice to develop new ideas and ways of conceptualizing and performing

CONTENT

Potential Advantages & Disadvantages

Detailed Summary of the Best Practice/ Emerging Issue

Did not provide a specific proposal to top management including a full discussion of advantages and disadvantages. Did not demonstrate an understanding of trends under consideration – relevant characteristics were not provided.

Provided a specific proposal to top management including a full discussion of advantages and disadvantages. Highlights one or more adv/disadvantages for specific focus to the needs of the organization.

Proposal includes a clear and full understanding of the trend under consideration – relevant characteristics were fully described.

In addition to meeting requirements of satisfactory, provided a critical analysis exploring closely related alternative options and appropriateness to organizational strategic and HR objectives. Recognizes relationship to other HR sub-functions.

Relevant Considerations in Implementation at a Specific Organization

Does not provide an appropriate rationale for implementation of these trends.

Provided an appropriate rationale for implementation of this “best practice” at a specific organization. Fully discussed considerations for implementation including organizational/strategic objectives, HR objectives, timing & cost considerations. Noted concerns in implementation specific to this organization.

In addition to meeting requirements of satisfactory, integrated the recommendation in the context of a total HR system. Policy recommendation differed across occupational groups where appropriate given clearly defined criteria as described in rationale. Demonstrated a full understanding of how implementation of this “best practice” might achieve both organizational and total HR objectives.

Research on this approach at other organizations- Impact on HR outcomes and costs

Does not provide a discussion of research on the effectiveness of these plans at other organizations.

Included examples and a full discussion of research on effectiveness at other organizations, including case studies, summary statistics and relevant industry where appropriate. Connection to this specific organization is appropriate.

In addition to meeting requirements of satisfactory, explored creative options within the context of research.

Connection to Human Resource Strategy and Related Sub-functions

Failed to note connection of these trends/best practices to other aspects of Human Resource Policies within the organization.

The connection to other aspects of HRM is noted.

Integration with HR systems is described. Consideration of options and impact on overall approach to HR and organization objectives.

Employee Communication

Didn’t provide initial thoughts on plan for employee communication.

Provided initial thoughts on employee communication. Noted who is to be involved in presenting the new approach/policy/program to employees and describes a preliminary approach to communication.

Final Note. I would like the pay-per-performance based on public schools. I also would like to incorporate the NO CHild Left Behind act. Also, I am not sure if you have resources that can be from the Proquest Database. This is from the University of Phoenix Online Library.

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