Journal of Personnel Evaluation in Education 12:4 387±394, 1999

# 1999 Kluwer Academic Publishers, Boston ± Manufactured in The Netherlands

On Rewards, Punishments, and Possibilities:Teacher Compensation as an Instrument forEducation Reform

BETTY MALEN

Department of Education Policy Planning and Administration, College of Education, University of Maryland±College Park

Abstract

This commentary is organized around three cross-cutting themes contained in the articles: assessing school based

rewards, envisioning other promising possibilities, and evaluating policy as well as people. The discussion of

these broad themes illustrates both the power and limits of policy initiatives, particularly in the area of monetary

incentives or sanctions as vehicles for enhancing school performance.

This special issue is a welcome addition to the literature on recurrent efforts to alter

teacher compensation in ways that might enhance school performance. The articles

assembled for this special issue examine recent efforts to implement school-based awards,

identify other compensation options, and underscore the importance of evaluating the

policies that impinge on schools as well as the persons who work in schools. The articles

provide empirical evidence and conceptual insights that warrant attention, especially in a

context characterized by clarion calls for ``results-based'' education reforms and fervent

efforts to use various combinations of rewards and sanctions to ``leverage'' school

improvement (Ladd, 1996).

This commentary is organized around the three cross-cutting themes noted above. The

®rst section on school-based rewards receives the most attention because the majority of

the articles in this volume address this topic. The second section on alternative

compensation strategies and the third section on the importance of policy evaluation

receive less attention, not because they are less important but because these topics are not

as frequently or explicitly addressed in the articles that comprise this special issue.

Assessing School-Based Rewards

School-based rewards for improved performance are a prevalent but understudied policy

option (Richards, Fishbein & Melville, 1993; Elmore, Abelman & Fuhrman, 1996). The

three articles that address various aspects of school-based awards (this volume: Kelley;

Heneman & Milanowski; and Milanowski) bring some data to bear on the topic and

thereby make an empirical contribution to our understanding of this reform strategy.

Each article in this set is important in its own right. For example, the Kelley article

focuses on the value-added impact of performance based rewards. It seeks to get at if and

how these various programs might inspire (or pressure) teachers in ways that go beyond

the motivational effects of the standards-based reforms in which they are nested. That is an

awesome challenge, since it is very dif®cult to gauge the impact of a particular policy, let

alone the impact of a particular component of a policy. But the challenge is taken up in a

sensible way. Drawing on employee motivation literature, the article addresses key

questions. Loosely translated and simply put, the questions are: Do the awards affect

motivation? If so, how so? If not, why not? The search for impact is not con®ned to a

search for direct effect. Rather, the lens is expanded to see if and how the performance

based awards might indirectly in¯uence teacher motivation. Adopting that broad view is

an astute move, since policy often wends its way to and through an organization via

intricate inroads that are neither readily apparent nor easily detected (Malen & Knapp,

1997).

The Heneman and Milanowski article complements the Kelley article because it adopts

a compatible conceptualization of the motivational potential of school-based performance

awards but extends the analysis to get at the conditions under which school-based

performance awards might be more or less in¯uential. The article illustrates how

mediating factors (such as perceptions of substantive and procedural fairness and

satisfaction with base pay) moderate teacher responses to monetary awards. In so doing, it

reminds us that motivation is a complex phenomenon and the reactions to a particular

inducement (or sanction) will, inevitably, vary considerably. The argument could be

pushed to suggest we may need different kinds of incentive systems, not simply a single,

school-based award. But that interpretation and other implications may be forthcoming, as

the authors' program of research matures.

The Milanowski article zooms in on the pivotal and perennial problem of measurement.

The article identi®es multiple sources of error embedded in efforts to design and

implement school-based performance award systems. This dizzying array of issues is

handled in a clear, digestible discussion of not only the sources of error but also their

consequences for the quality of organizational decisionmaking, the accuracy of the

labeling that is an inherent feature of any public award system, and the fairness of the

mechanisms used to disperse (and withhold) rewards.

In combination, the articles demonstrate that the organization-based versions of ``merit

pay'' may have some of the same limitations and liabilities associated with individual-

based merit pay plans (Malen, Murphy & Hart, 1988). These organization-based

renditions embody the presumption that changing the unit of analysis (from individual

performance to organizational performance) will somehow overcome the objections to

more conventional forms of ``merit pay.'' That presumption is open to question for several

reasons.

First, the ®nancial stipends are relatively small (for example, $1,000 per year). They are

seen more as an acknowledgment of one's effort than an incentive to alter one's behavior.

While the Kelley and the Heneman and Milanowski articles are relatively optimistic about

the motivational potential of school-based performance awards, this optimism rests largely

on self-report data, acquired as an after the fact response to a new program, not as a pre-

388 B. MALEN

post measure of motivational levels over the long haul. As the authors candidly and

correctly observe, the data do not support clear-cut claims about the motivational punch of

school-based performance awards. We know that the attitudes and actions of teachers are

shaped by many individual and organizational factors. Amid this complex mix of forces,

small stipends may well be viewed as a desirable outcome. But it seems to be more a leap

of faith than a matter of fact to suggest that such stipends (or, more precisely the chance of

getting a stipend once a year or so) would prompt teachers to substantially alter their

behavior in particular, predictable ways.

Second, the organization-based awards may preempt some of the faculty division and

derision that accompany the installation of individual-based merit pay plans in schools, but

they may not have the power to engender collegial environments in schools. While some

of the early evidence from select locales appears encouraging (such as, the Douglas

County, Colorado, example cited in Kelley, this volume), developing constructive and

enduring collegial relationships in schools is not solely, even primarily, a matter of

monetary incentives. The norms of noninterference and isolation are very durable norms in

schools; the opportunities for meaningful collegial exchange are few and far between

(Malen, 1993). It may be just plain unrealistic to expect a modest school-based award to

engender collegial interaction or foster more concentrated, coordianted collective action,

particularly if the awards encourage ``gaming,'' cheating, or other disconcerting side-

effects.

While it is hard to gauge the extent to which these disconcerting side-effects are related

to the cash awards as opposed to the broader accountability policies or to other pressures

besetting individuals and schools, the articles suggest the awards may precipitate or

contribute to ``gaming,'' cheating, and other negative behaviors. Insofar as the awards

operate as perverse incentives, they may make it less likely for teachers to form the sorts of

collaborative networks that are perceived to be so desirable. Deception and deceit are not

compelling rallying points for teacher collaboration. Rather, they may be sources of

division and derision that become every bit as troublesome as the faculty strains that

occurred under individual-based merit pay.

Third, the articles also suggest that organization-based merit pay does not solve the

evaluation problems that plagued individual-based merit pay. Rather, school-based

rewards just lift the same problems to a new level.

Individual-based merit pay plans (like those tried, revised, or repealed in Florida,

Tennessee, and Utah) taxed teacher evaluation systems in numerous ways. But the

problems were not just technical matters that might be addressed by re®ning evaluation

instruments or adopting a set of personnel evaluation standards (Stuf¯ebeam, 1988). In

leveling their various objections against individual merit pay, teachers tended to reject the

very notion that their work could be reduced to and assessed on a few measurable goals or

a few sets of prescribed behaviors (Malen, Murphy & Hart, 1988). Given such deep-seated

reservations about the fundamental fairness of teacher appraisals as a means to make

de®nitive statements about the substantive character and ®nancial worth of their work,

educators strenuously and successfully resisted efforts to link teacher pay to teacher

performance (Malen, Murphy & Hart, 1988).

Organization-based awards tax evaluation systems in similar ways. Indeed, they raise

TEACHER COMPENSATION AS AN INSTRUMENT FOR EDUCATION REFORM 389

parallel technical and political issues. For example, can the work of schools really be

reduced to a few major goals, captured by a set of indicators and assessed in terms of a

cluster of measurable proxies? Can we really sort out a school's contribution to (or blame

for) ¯uctuations in gross measures of student achievement? Can we really be certain that

the categories of school effectiveness or ineffectiveness are more than the artifacts of

measurement technology or manifestations of scoring errors? The Milanowski article

identi®es some of the measurement issues inherent in efforts to classify (and reclassify)

schools on the basis of student performance and some of the deleterious effects that a

policy that seeks but fails to make accurate and fair appraisals of school performance

might engender.

All the articles acknowledge that various stakeholders, including professional educators

and broad publics, need to view the evaluation system that undergirds the dispersement of

rewards and sanctions as accurate and fair. For reasons identi®ed in these articles and other

sources, the measurement issues remain consequential but unresolved (Clotfelter & Ladd,

1996). Competing conceptions of what constitutes appropriate school performance,

competing conceptions of what counts as dependable indicators of school performance

and valid bases for comparing the performance of schools that operate under vastly

different circumstances, and knotty issues associated with the choice and use of alternative

measures all suggest that neither technical nor political consensus on these fundamental

issues is imminent.

Fourth, the articles prompt one to ask whether the multiple supports that may be needed

to help ``low-performing'' schools improve and to ensure that every school has an ``even

chance'' for success, however de®ned, are available. Individual-based merit plans often

lacked provisions to help nonrecipients improve their performance. The operating

assumption seemed to be that if the system would just reward the best, that action would

inspire the rest to improve their performance. Apparently by some might or magic,

teachers would secure the knowledge and skills they needed to improve their performance,

and the conditions that limited student learning would be recti®ed. School-based award

programs, at least as they currently operate, may be subject to the same criticism. The

provisions for assisting schools may (or may not) provide the kinds of aid required to alter

school performance signi®cantly or permanently (Cohen, 1996). Moreover, the forms of

assistance promised may not be provided (Elmore, Abelman & Fuhrman, 1996). Thus

even schools that may be inspired by the school-based incentive system may be stuck or

stymied. They could be more willing but still not be able to improve. Insofar as school

improvement is a function of capacity as well as will, the school-based award strategy

seems at best incomplete (McLaughlin, 1987).

Besides challenging some broadly held but largely untested assumptions about the

ability of organization-based merit pay to overcome the problems of individual-based

merit pay, these articles raise some broader issues. For example, when one juxtaposes the

mixed evidence on motivational impact with the multiple sources of measurement error

and the massive effort required to attend those matters, it seems reasonable to ask whether

the motivational impact is worth the measurement investment. It also seems important to

determine whether allocations based on some indicators of improvement are fair rewards

in the sense that ``deserving'' schools receive them and also in the sense that struggling

390 B. MALEN

schools are not further disadvantaged because funds are allocated on standards of

organizational performance rather than principles of ®nancial equity. While the articles do

not raise these questions directly, when read as a set they precipitate a host of questions

about school-based performance awards. In short, they offer a provocative as well as a

substantive contribution to the sparse literature surrounding a prevalent reform.

Envisioning Other Promising Possibilities

The Muncey and Conley article addresses teacher compensation not by evaluating policies

that incorporate various compensation strategies but by articulating a continuum of

possibilities rooted in and derived from an analysis of teacher work. In so doing, the article

makes an important conceptual contribution. It generates ideas that may hold promise for

aligning teacher compensation systems with the nature of the work we may want teachers

to carry out rather than the scores on select tests we require students to take.

One of the virtues of this approach is that it brings into view dimensions of incentives

that might be easily overlooked. For example, this article reminds us that for teachers,

rewards take many forms beyond a salary bonus. Teachers value additional time, smaller

classes, more instructional assistants to give them ``hands on'' help with students,

exemptions from noninstructional duties, professional interactions, and the like. To use the

knowledge of what matters most to teachers to construct an incentive system for teachers

seems to be an overdue insight. Consistent with the plea captured in Richard Elmore's

notion of ``backward mapping,'' this article invites us to think about what sorts of work we

want accomplished and then to create the organizational contexts that support that work.

But such fundamentally sensible approaches to the construction of policy are not

without their problems. As the authors note, we have little or no data regarding how the

options on the continuum actually play out in terms of teacher motivation, collegial

interaction, or occupational satisfaction.

Moreover, evaluating the performance of an intermediate unit (a team) is every bit as

murky and messy as evaluating the performance of an individual or an organization. Many

of us have tried to ®gure out fair ways to evaluate group work in our courses, whether

offered at schools or universities. Determining who made what, if any, contribution to the

group product is not easy. In these settings, the distribution of rewards and punishments in

the form of grades is subject to considerable criticism and, at times, formal appeal. The

dif®culties embedded in developing group-based evaluation systems that can withstand

this kind of scrutiny illustrate some of the challenges that group-based pay imposes on the

evaluation system.

Perhaps on teacher teams, gauging the individual's contribution to the group effort

would be declared unnecessary or unimportant. But students in courses do not appreciate

what Mancur Olson termed the ``free-rider'' problem. My hunch is that teachers would not

appreciate it either. Insofar as compensation must be a fair re¯ection of contribution to the

entity being rewarded, the team-based approach may be every bit as troubling as the

individual-based and the organization-based pay for performance plans.

Some might argue that compensation based on the nature of teacher work rather than the

TEACHER COMPENSATION AS AN INSTRUMENT FOR EDUCATION REFORM 391

results of student assessment takes the emphasis off student learning. That may be the

case, rhetorically. It need not be the case, operationally. After all, the point of teacher work

is student learning. Insofar as that work can be more effectively addressed through teams,

it may be wise to develop the organizational infrastructure to support team work. The

continuum of options identi®ed and discussed in this article seems to be a fruitful point of

departure because it is rooted in the literature on teacher work and it sets out options that

can be examined and compared along common dimensions of interest. The continuum

arrays a host of promising possibilities that get beyond the tendency to rely on the

willingness of teachers to team on their own time or to accept modest schedule

adjustments or token fee-for-service payments. It suggests how compensation systems

might be used to support various forms of teaming and how compensation systems might

be used to move teaming from the periphery to the center of teachers' work. Whether

compensation systems, however construed, can overcome the deeply engrained norms of

teacher autonomy and the multiple issues embedded in developing constructive

collaborative arrangements alluded to in the previous section of this commentary is an

open question. But the continuum provides a way to think about how organizational

supports might be con®gured as well as a mechanism that could be used to expose

discrepancies between the kind of work arrangements we may wish to encourage and the

way we allocate pay.

Evaluating Policy as Well as People

Since teacher compensation and evaluation systems are seen as levers for organizational

change, they become easy and frequent targets for education reform (Stern, 1986; Conley

& Odden, 1995). These dimensions of an organization may or may not be altered by

reform policies, but they continuously reappear as potential levers for instituting or

supporting education reform. Perhaps it is not surprising that alternative approaches to

teacher compensation and related issues of evaluation are, once again, occupying

prominent places in education policy debates.

The current emphasis on standards, performance-based assessments, and public rewards

and punishments re¯ects a seemingly sensible, sequential approach to education reformÐ

to develop clear goals, align policies affecting each component of the organization so that

they support those goals and complement rather than offset each other, evaluate

performance, and then administer rewards and sanctions. But this generic, mechanistic

recipe breaks down when the object of reform is an intensely human enterprise such as

education (Malen & Knapp, 1997). Neither state governments nor local schools operate in

such a purely rational manner in part because ``the nature of teaching and learning work is

not suf®ciently technocratic [and] the nature of schooling [is not] suf®ciently apolitical to

allow them to do so'' (Darling-Hammond & Wise, 1985, p. 316).

However appealing this reiteration of rational steps may be, specifying how policies do

(or do not) support goals and how they might offset or complement other policies is not a

simple, straightforward task, at least in education. Articles in this volume echo the ®ndings

of decades of policy implementation research (McLaughlin, 1987). Simply summarized,

392 B. MALEN

there are multiple factors (such as individual predispositions, institutional cultures, and

contextual forces) that shape people's responses to policy overtures. And, as the Muncey

and Conley article in this volume illustrates, there are multiple policy possibilities that

may prove to be more robust than the ``performance-based'' reward-sanction syndrome

that has become so pronounced. For these and other reasons, the challenge of formulating

and aligning policies is formidable, technically and politically.

The articles in this volume make it clear that evaluating policies in terms of their actual

effectsÐanticipated and unanticipated, direct and indirectÐis essential because efforts to

construct positive incentives may have very perverse as well as relatively positive effects.

Carefully conceived and conscientiously executed policy evaluations can help expose and

weigh the tradeoffs. The articles in this volume also make it clear that envisioning new

possibilities in terms of their potential effectsÐboth positive and negativeÐis essential

because efforts to construct policies can become narrow, sterile, and ®xed. Carefully

derived and explicitly articulated options can generate promising ideas for further

consideration. In these and other ways, this special issue underscores the importance of

looking at both how policies actually operate as well as how policies might be effectively

conceived.

The special issue also illustrates how policy evaluation and policy invention may be

complementary, at times synergistic processes. While policies are rarely, if ever, forged

through processes that are primarily, let alone purely rational, ideas do matter in the

construction and revision of policy (Kingdon, 1984). The articles in this special issue

certainly contain interesting and important ideas that could inform and elevate policy

deliberations. For example, the articles could serve as a springboard for efforts to

understand incentives broadly conceivedÐto understand how compensation systems,

evaluation practices, accountability measures, and salient features of the work environment

(such as class size, planning time, noninstructional duties, collegial relationships, student

characteristics, parental supports, availability of materials, opportunities for professional

development, and the like) make teaching a profession that capable and committed

individuals want to enter not exit. This knowledge may help us construct a composite

picture of extrinsic and intrinsic incentives that affect the occupational choiceÐwho is

attracted and retainedÐas well as the professional performance of people in schools.

Perhaps then we will have a deeper understanding of how it is that money really matters.

But a system of incentives, however comprehensive and sophisticated, will be a hollow

victory unless we also create a system of opportunitiesÐa system wherein capacity and

will are coupled in ways that enhance the quality of life and learning in all schools. It may

well be in the realm of capacity where money makes the most noticeable and the most

consequential impact on the aspirations and the accomplishments of schools.

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