Teacher Incentive Fund grants and early impacts of the pay-for-performance component

The Teacher Incentive Fund (TIF) provides grants to support performance-based compensation systems for teachers and principals in high-need schools. This study measures the impact of pay-for-performance bonuses as part of a comprehensive compensation system within a large, multisite random assignment study design. The treatment schools were to fully implement their performance-based compensation system that included four required components. The control schools were to implement the same performance-based compensation system with one exception—the pay-for-performance bonus component was replaced with a one percent bonus paid to all educators regardless of performance. This first of four planned reports provides implementation information prior to educators receiving annual performance measure information or payouts. Fewer than half of all 2010 TIF districts reported implementing all four required program components, although 85 percent reported implementing at least three of the four. In a subset of 10 districts who participated in the random assignment study, educators' reporting of the program indicated most misunderstood the performance measures and the amount of pay-for-performance bonus that they were eligible for. Most educators were satisfied with their professional opportunities, school environment, and the TIF program. Educators in those schools that offered the pay-for-performance aspect of TIF tended to be less satisfied than those in schools that did not offer such bonuses. However, educators in schools offering pay-for-performance bonuses were more satisfied with the opportunity to earn additional pay, and a greater percentage indicated feeling increased pressure to perform due to the TIF program. In summary: • Fewer than half of the 153 TIF districts reported implementing all four required components of the TIF program, although most implemented three of the four components. • Districts expected to award a pay-for-performance bonus to more than 90 percent of eligible educators, with the average payout about 4 percent of the average U.S. educators’ salary. The districts expected a maximum pay-for-performance bonus for teachers that was twice as large as the average bonus, and a maximum bonus for principals that was 50 percent larger than the average bonus. For the subset of 10 districts that agreed to participate in a random assignment design, key findings on implementation and the effect of pay-for-performance bonuses on educators include the following: • Many educators misunderstood the performance measures and the pay-for-performance bonuses used for TIF. • Most teachers and principals reported being satisfied with their professional opportunities, school environment, and the TIF program. • Educators in schools that offered pay-for-performance bonuses tended to be less satisfied than those in schools that did not offer such bonuses.