Financial Education -- Bonus Pay for Teachers

Dec. 18, 2006 — -- As business executives look to collect bonuses this holiday season, public school teachers are starting to join that revelry.

The Department of Education recently launched the first federal program to use bonuses to motivate teachers who raise test scores in at-risk communities, and awarded the first $42 million of the $94 million Teacher Incentive Fund last month.

Some states were already handing out merit pay, which remains controversial in school systems. Some supporters say if it works in the private sector, why not try it among educators.

"If you work at a large company … you receive performance pay, so I believe teachers deserve incentive pay," said Marilyn Manjang, a third-grade teacher at Lyons Elementary School in Houston.

At her school, 95 percent of children live at the poverty level, but it is still considered an exemplary school. This year Manjang could earn an extra $3,000 if her students improved their standardized test scores.

In an effort to recruit, retain and motivate teachers, the Houston Independent School District implemented a performance-pay program that would reward individual teachers for their students' performance.

District Superintendent Abelarvo Saaverda believes this program is key to improving the education students in his district receive.

"It's going to attract more high-performing teachers into our school system," he said. "And any time I can put a high-performing teacher in front of a classroom, that's good for kids."

Texas is engaged in a $300 million experiment to find out whether big bonuses can produce big gains in student achievement. It's one of the largest teacher-incentive plans in the country.

Twenty-three other states and the District of Columbia have embarked on similar initiatives. Florida, for example, has launched a program that spends nearly $150 million to give bonuses to its top teachers.

Texas administrators say they don't have enough evidence to prove it's working, but since the program began, standardized test scores have gone up 10 points in Houston, while nationally scores have dropped by seven points.