It seemed like a promising idea: rewarding teachers with more pay if their students' performance improves. But according to a recent Urban Institute study, it looks better on paper than in the classroom. In an analysis of 13 merit-pay incentive plans implemented by school districts around the U.S. in the 1980s and 1990s, the institute's researchers found that 11 had been terminated by 1993.

Most school districts trying merit-pay plans did report some positive effects, such as declines in teacher absenteeism, improved teacher motivation, and increased attention to teaching. But these were often offset by morale problems stemming from increased rivalry among teachers and resentment when teachers were denied rewards they felt they deserved. High program costs and heavy demands on administrators also eroded community support for the plans.

The bottom line is that despite high hopes, none of the 13 districts studied was able to use teacher pay incentives to achieve significant, lasting gains in student performance.

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