CEOs split on paying for good grades

CEOs use raises, bonuses and stock options as carrots to get workers to excel. Do they apply similar pay-for-performance strategies to their children's education?

In many cases, yes.

"We don't want our kids to be average," says David Perdue, CEO of Iviation, an aviation networking site in Cordova, Tenn., who pays his second- and fourth-grade children for A's and B's and gives them bonuses for making the honor roll.

When John Pugh's children, now 30 and 28, were in high school, he wouldn't allow them to drive without a B average. He paid his daughter for good grades in chemistry and geometry, the classes he says she found to be the most challenging. "I kidded them that they were on commission," says Pugh, president of Cortech Engineering in Anaheim, Calif.

"Incentives are the tools we use to generate self-motivation," says Graham Barnes, CEO of Concerro, a San Diego company that helps manage shift work for nurses. He pays his children, ages 15, 11 and 8, to complete homework and rewards them with trips and computers for report cards with straight A's.

Are CEOs onto something? Is paying kids for good grades a secret of success? That's debatable, but it's no secret among educators and real estate agents that neighborhood schools with children who have the highest college-entrance test scores are those where the parents are well-educated and successful. And the most successful parents may be more likely to pay for grades.

More than half of the 74 CEOs, chairmen and presidents surveyed last month by USA TODAY said they think paying for grades is a good idea. When asked if they pay, or have paid, their own kids for grades, 33 of 66 said yes.

Contrast that with a Union Pacific Foundation survey this year of 450 high school principals in communities in 21 states that border the tracks of the nation's largest railroad. Asked if they thought students should be paid cash for earning good grades or scoring higher on tests, 15% said yes. And they were in poor communities where almost any experiment is worth a try, said Jim Hoffmann, executive director of The Principals' Partnership, a program the foundation funds.

Deeply felt opposition

The 45% of CEOs who are opposed to pay for grades are often adamant in their opposition. Paying for grades is a "train wreck waiting to happen," says Jeff Snipes, CEO of San Francisco leadership development firm Ninth House, and father of children ages 9, 6 and 2.

Despite the split in CEO opinion, as children settle in for the 2008-09 school year, business interests are lining up behind pay-for-grades initiatives at schools in Atlanta, Baltimore, New York and elsewhere. The most ambitious project, funded by the foundations of ExxonMobil, Bill Gates and Michael Dell, will pay students at 67 high schools in seven states $100 to $200 for scores on advanced-placement (AP) college-prep exams that are high enough to earn college credit. It also awards teachers for getting the right training to teach AP classes and pays them bonuses for each successful student.

It's an expansion of an experiment in Dallas, and program director Tom Luce of the National Math and Science Initiative says enrollment this fall in AP courses is up 80% from last year at those 67 schools. When Luce was told that many CEOs said children should not be paid to learn, he said it was the same as awarding merit scholarships, something CEOs would unanimously support, he says.

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