The Case Against Merit Pay for Teachers

An important debate is occurring in my home state of Indiana, the discussion is around merit pay and teachers.  And this debate is not just in Indiana, it is going on all over the US.  So let’s take a look at the bad things that merit pay does for education or really any system (rather public or private sector).

If General Motors were to double the pay of everybody . . . performance would be exactly as it is now.  – Norb Keller (from The New Economics

The above quote is reflective of a deeper problem.  The emphasis on pay is the wrong focus.  The issue is “method” and until we begin to find more effective methods in the classroom all this is just fogging up the real issues.

Method is about to be buried in an avalanche of bureaucracy that is needed to implement a merit pay system.  This both increases costs in implementing these systems and keeps us away from focusing on method.

Merit pay (or pay for performance) is a form of forced ranking.  The performance of all teachers is a bell-shaped distribution:

The thinking appears plausible reward the high performers and reduce the low performers.  The problem with this thinking is that with any distribution there is always someone at the top and bottom.  There is no guarantee that if we fire the bottom performers that if we dip into the pool of teachers we will find better ones than what we have now.

There is another problem with this thinking.  Concept from The New Economics: In mathematical terms, if the contribution of the individual is x and yx is the effect of the system on the individual’s performance.  Let’s say we have $8 million in sales. Our formula is:

x + (yx) = $8,000,000

Everyone who supports a merit system believes they can solve this equation for x (individual).  They ignore the predominant interaction of the system with the individual.

Our systems drive the performance of any organization, not the individual.

What is a system?

A system is the sum of all the parts . . . the school building, students, work design, technology, parents, teachers, administrators, thinking, structure, measures, etc.  But the to change the system, we have to understand its purpose and derive relevant measures to this purpose.  This than can be followed by experimentation with method to improve our system’s performance.

If we do this we shift the whole curve that represents the performance of all teachers.  A small shift in the whole curve represents a huge improvement and larger than just shifting a small group of high performers.

It was W. Edwards Deming and his insightful understanding of variation that led to the conclusion that 95% of the performance of any organization is attributable to the system and only 5% the individual.  We are wasting precious time in education focusing on the individual, we need to address education systemically and not individually.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at [email protected].  Reach him on Twitter at LinkedIn at

Tripp Babbitt is a columnist (Quality Digest, PSNews and IQPC), speaker, and consultant to private and public service industry.

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