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Michael Podgursky is a professor of economics at the University of Missouri-Columbia, where he served as department chair from 1995 to 2005. He has published numerous articles and reports on education policy and teacher quality and co-authored a book titled Teacher Pay and Teacher Quality. Podgursky is a member of the advisory boards of the National Council on Teacher Quality and the American Board for Certification of Teacher Excellence. From 1980 to 1995, he served on the faculty of the University of Massachusetts at Amherst. He earned his bachelor's degree in economics from the University of Missouri-Columbia and a Ph.D. in economics from the University of Wisconsin-Madison.

1) You recently conducted some research on merit pay. What basically did you find out?

Matt Springer of Vanderbilt University and I have written an extensive survey of research on teacher and administrator performance pay that appears in the current issue of Journal of Policy Analysis and Management.We reviewed a variety of strands of research that help shed light on the efficacy of teacher and administrator performance pay in K-12 education.We reviewed the existing evaluation research on individual and group plans in the U.S. and other countries, current research on teacher value-added, experience in charter and private schools, and the incentive design literature in economics and management.While the research base on K-12 plans is at present too thin to tell us the specifics of a "best practice" system, it is sufficiently positive to suggest that school districts that want to raise student performance should be piloting programs to see what works in their context.We think that the existing research literature, taken as a whole, suggests thatperformance pay plans can be a cost-effective and potent way to raise student achievement.

2) In this age of mainstreaming and inclusion, with so many children with exceptionalities being mainstreamed into the regular education classroom, is merit pay a legitimate approach?

I see no reason why mainstreaming of special education students necessarily derails performance pay.First, our survey considered not only individual but group incentive pay schemes.Mainstreaming is likely to be much less of a program in a school-wide as compared to an individual scheme.Moreover, it is more likely to be a problem for systems based on heavily on test-scores, as compared to more diverse systems that include other indicators like supervisor assessments.In principle there is no reason a teacher with a particularly challenging mainstreaming assignment cannot be judged along with other teachers with less demanding circumstances.All such contextual factors can and should enter into a formal evaluation system.

3) Back in my doctoral days, I conducted some research on merit pay, and I found that a lot of teachers did not want more money, or better medical/dental benefits or computers or supplies- they wanted to get the behavior problem or discipline problem out of the classroom. Do you think the same holds true today? What comments albeit informal, are teachers making today?

Clearly lots of teachers leave the profession or a particular school for reasons other than pay. Surveys of exiting teachers back that up.On the other hand, statistical studies of teacher turnover consistently find that pay matters.The same type of studies also find that environmental factors affect turnover as well.So the question policy-makers who want to lower turnover have to confront is what is the most cost-effective thing to lower turnover.If $100,000 spent on improving discipline lowers turnover more than $100,000 spent on pay, then the former is the way to go.

Matt and I aren't claiming that performance pay will fix all school problems.What we do believe is that it can make turnover less costly for schools.If more effective teachers get larger pay increases their average turnover rates will fall.If less effective teachers get smaller increases they will be more likely to leave.

Rather than continually complaining about teacher turnover, administrators need to begin to harness it to work in their favor.

4) As teachers " teach to the test " do you think that higher order and critical thinking skills may suffer?

Economists who study incentive pay design call this the "multi-tasking problem."Basically it says that if you incentivize activities that are easier to monitor you will tend to get more of them and less of other valuable activities that may be less easily monitored.

I think it would be a bad idea for a school to base its teacher performance pay system entirely on student test score gains.A variety of indicators mightbe considered, including supervisor evaluations, professional development activities, as well as peer and parent evaluations.In my opinion, the first step in an evaluation system should be to ask "what are we trying to accomplish?"When we get that list down to reasonable set of expectations, then you develop measures or indicators of those factors, and you measure performance based on a set or vector of gains off of those benchmarks.Certainly academicperformance as measured by test score gains should be one of those, but there should be others.

By the way, there is a very basic idea in statistics that the more measures you have of something, even if they are all individually "noisy, " as long as the noise on any single measure is somewhat independent of that in other measures, then by pooling them you get a more accurate measure of true performance.It's captured in the aphorism:"don't put all your eggs in one basket."

5) What are charter schools doing different and how would a merit pay system affect them?

Survey data from the U.S. Department of Education, which we analyze in the study, show that charter and private schools are much more likely to deviate from traditional salary schedules and pursue hybrid, performance-oriented pay schemes.

By the way, the mere fact that private and charter schools pursue their own pay structures, rather than linking them to dozens or even hundreds of other schools in a district, gives them flexibility that is lacking in rigid, district-wide single salary schedules.

6) How do you go about assessing teacher quality? And how does it really matter?

For purposes of performance pay evaluations it might be better to defuse matters by simply referring to a performance evaluation rather than "teacher quality."A performance evaluation merely describes the factors that will be rewarded in a compensation system.For example, the current regime rewards master's degrees and seniority, but we don't go around saying teacher A is higher quality than teacher B because A has seven years and 30 credits, whereas B has ten years and an MA.

The point is to move to a system that ties compensation more directly to factors that are more closely aligned to school performance and needs than simply experience and graduate education credits or degrees.

7) In terms of economics, is the average taxpayer getting a good return on their investment? And when do we reach a "point of diminishing returns"  when requiring more and more certification and coursework from teachers?

It's certainly the case that students are getting a good return on their educational investments.Moreover, most studies show that the social return (counting all the costs of public education) is positive and substantial for public K-12 investments as a whole.However, that does not mean that resources cannot be more effectively used.For example, careful econometric studies of teacher value-added have consistently failed to find a significant positive effect of teacher graduate degrees on student performance.Yet nearly every salary schedule in the US rewards teachers for earning a MA degree, whether related to their teaching field or not.The same is true for experience.While nearly all studies find that brand new teachers are on average less effective than experienced teachers, the returns taper off fairly quickly.This is not to say that more experienced teachers such not earn more on average than less experienced teachers, but the differential shouldbe based on something more than having a pulse for one more year.

8) Let's discuss supply and demand. I am pretty sure we have a shortage of math/science and foreign language teachers. Do we provide hiring bonuses, more pay and once we have them, how do we keep the good ones in the classroom?

Our articlefocused on performance pay.We plan future studies on field-based differentials, however, you are absolutely right that a typical school district has many more applicants per vacancy in fields like elementary education, physical education, or social studies, as compared to math or science (and sometimes languages).In higher education, and most fields other than K-12 education, the response would be to raise relative pay for those shortage fields.In higher education, finance professors make more than economists, and economists earn more than history professors.It's a simply matter of supply and demand in the labor market.Some skills command higher returns outside of teaching than others.That doesn't demean history professors.History professor know they are likely to earn less money than finance professors (with exceptions like Stephen Ambrose) when they enter graduate school.

There's a saying we have in economics – "you can't repeal the law of supply and demand."What that means is that if you don't let price clear the market then something else will.In the case of science and math, since we don't allow relative pay for these teachers rise, the market clears in the quality dimension.We have many educators "teaching out of field" in those areas as compared to fields in which supply is more plentiful.

9) What are you currently working on ? Researching?

For over a decade I've been interested in teacher labor markets and teacher compensation.I'm very eager to follow all the experiments under way in performance pay.For example, as you may be aware, Congress passed a half billion dollar program – the Teacher Incentive Fund – to support district experiments in teacher and administrator performance pay.There's a lot of new programs to study.You also noted that there is a lot of innovation in this area going in charter schools as well.

Also, I'd think that we have to make sure that we don't get the cart before the horse.It's surprising and somewhat discouraging to find out how many school principals are paid according to rigid salary schedules.It makes little sense to implement performance pay for teachers if school administrators are still paid in such a manner.Thus, I'm also interested in studying performance pay systems for school administrators.

Another colleague and I have research under way on teacher retirement benefit systems.There are lots of problems looming there, but that's a topic for a future interview.

Published September 17, 2007