The one-room schoolhouse may be a relic of a bygone era, but teacher compensation in Canada remains stuck in a time warp. Currently, teacher compensation is determined by rigid salary schedules based on tenure and credentials—factors that have little if any positive impact on student achievement.

Compensating teachers for raising student achievement is a policy that’s better for teachers, students, and taxpayers.

Outside of the teaching profession, close to three-fourths of Canadian employees already receive performance-based and variable pay. In fact, compensation based on results is the rule rather than the exception at more than eight out of 10 companies worldwide because this approach is one of the most effective strategies for attracting and retaining top talent.

It’s well established that effective teachers can add up to one and a half years’ worth of additional student learning in a single school year. They can also overcome adverse out-of-school socioeconomic factors that can hinder students’ academic achievement, such as poverty, native language, parental education levels, and parental marital status.

Yet highly effective teachers are the most likely to leave the teaching profession in large part because of rigid salary schedules that do not reward their effectiveness with regard to higher student achievement. Rigid salary schedules also make teaching less appealing to talented young people able to choose from a variety of careers that recognize and reward excellence.

Ultimately, the overall quality of the teaching workforce suffers from the inability to attract and retain top teachers, which negatively affects student achievement.

Other countries facing far greater challenges than Canada realize that education practices of the past cannot meet the needs of a competitive 21st century world. Consequently, the number of countries implementing incentive pay for teachers is proliferating after decades of increasing education funding overall with no commensurate improvement in student achievement.

Some are part of well-established national reform efforts, such as programs in Chile and England. Others are smaller in scope supported through local public/private partnerships, including programs in India, Israel, and several local school districts throughout the United States.

The design of successful teacher incentive pay programs is as varied as their locations. Some incentives are awarded to groups of teachers, some to individual teachers while others offer a blend.  Several programs including programs in Chile, Dallas, Texas, India, and Israel distribute group incentives to teachers, Programs in England and Little Rock, Arkansas, offer incentive awards to individual teachers based on the achievement gains of their students. Several other programs offer blended group and individual incentives to teachers.

These successful teacher incentive programs award pay incentives ranging from 10 per cent to more than 100 per cent of teachers’ average monthly salaries, depending on base salaries. These programs realize student achievement gains equivalent to one-half to more than one full academic year of learning. Additionally, official evaluations find that these successful incentive pay programs are between two and 10 times more cost effective than class-size reduction efforts and are up to nearly nine times more cost effective than simply raising teacher salaries.

Regardless of location or size, successful teacher incentive pay programs share a singular design feature: student achievement is the primary or sole basis for teacher incentive awards. Successful programs share five features. They define expectations for teachers with teachers; support teachers in meeting stated expectations; reward teachers as promised; build programs to last with smarter spending; and promote a culture of continuous improvement with ongoing, customized professional development.

Since Canada is currently among the top global educational performers, policymakers have the distinct advantage of crafting sound teacher incentive pay programs that work best for their specific jurisdiction’s unique circumstances by design, not out of desperation over chronically poor student achievement.

Yet the current decline in Canadian students’ performance, particularly in math and sciences, wide variations in student performance across the provinces and territories, chronic achievement gaps between Aboriginal and non-Aboriginal students, and the escalation of educational expenditures in virtually every province provide justification enough that now is the time to consider proven and cost-effective policy measures such as incentive pay for teachers to enhance student achievement outcomes.