Approaches to Designing a Merit Pay Plan

Paper Summary:

The author of this paper shows that a merit pay plan can be successful for teachers if well planned. He explains the term "merit pay" and shows how it can be used as an incentive for teachers as a reward for higher levels of performance. Advantages and disadvantages of this plan are also investigated.

From the Paper:

"Though there have been many sides of the debate over merit pay systems in schools, there have been hundreds of successful plans implemented in corporate America. Merit plans have been the standard since the 1980s in factories. There is no reason why schools cannot enjoy the success shared by corporate America. Prior to the 1980s, merit pay was simple. If you met your sales or production goals, your boss got a bonus. He may share it with you in the form of a Christmas ham or if you were lucky a small cash bonus so that you could buy your own ham. As international economic competition increased in the early 1980s, U.S. corporations, desperate to regain their competitive edge, began to experiment with measuring individual worker performance. They established pay incentives to make improvements in formerly hard-to-measure categories of output and in previously intangible areas like customer service or product quality."

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