Education researcher Jay P. Greene argues the agreement between the school system and the Chicago Teacher’s Union is a victory for true merit pay over “phony merit pay.”
What’s the difference? From Greene’s blog:
True merit pay — the kind of compensation for job performance found in most industries — provides effective employees with continued employment and regular raises while ineffective workers lose their jobs. If you do a good job you get to keep getting a pay check and if you don’t you have to look for work somewhere else. That’s true payment for merit because un-meritorious workers stop getting paid altogether.
In phony merit pay — the kind that hardly exists in any industry — there is a mechanistic calculation of performance that determines the size of a small bonus that is provided in addition to a base salary that is essentially guaranteed regardless of performance. You can stink and still keep your job and pay. The worst that can happen is you miss out on some or all of a modest bonus. To make it even more phony, in the few cases where this kind of phony merit pay has been tried, the game is often rigged so that virtually all employees are deemed meritorious and get at least some of the bonus.
When Chicago closes a traditional public school for low enrollment the teachers are laid off. The new contract appears to place some limits on this, but the practice has generally been preserved. In addition, unlike in some other big cities, principals in Chicago are free to hire teachers as they see fit and are not forced to take teachers laid off from school closures. The new contract does require that half of all newly hired teachers come from those laid off and guarantees re-hiring only for the highest rated teachers, but according to the city’s summary of the agreement: “Principals maintain full authority to hire whichever teacher they deem best.”
The net effect of growing charter schools, closing under-enrolled traditional public schools, and only hiring back the best and most desired teachers from those schools is a true merit pay system. Bad teachers are let go. Good teachers not only get their job back, but they also get an extremely generous pay raise over the next four years for staying and being good. That’s real merit pay.