Teacher Incentive Pay that Works

Teacher compensation in Canada is stuck in a time warp. It is determined by a rigid salary schedule based on tenure and advanced degrees—factors that have little if any positive impact on student achievement. Outside of the teaching profession, surveys suggest that 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.

Countries other 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.

The 10 case studies included in this global survey were selected because they reward teachers based primarily or solely on student achievement. This criterion means that numerous compensation schemes are excluded because they reward teachers based largely (if not exclusively) on inputs such as seniority, length of time teaching, professional development, or credentials, and not on student achievement. Seven additional case studies are included as examples of approaches and policies to avoid. These programs attempted to accomplish goals similar to the effective incentive pay programs, but they failed for a variety of key reasons that policymakers should keep in mind. This global survey offers key lessons for policymakers. They include: 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.