Merit Pay Programs for Improving Teacher Retention, Teacher Satisfaction, and Student Achievement in Primary and Secondary Education : A Systematic Review

Abstract

In general, the challenge for compensation reform is that the theory makes intuitive sense–rewarding more effective teachers with additional compensation can retain those effective teachers, encourage others to become more effective, and recruit higher performing individuals into the education field. However, the methodological and practical issues associated with implementing such a system are complicated, in that no single merit pay “plan” exists; instead, there are numerous ways in which school leaders have implemented a merit pay plan for their teachers. The details of these plans are important to understand in determining the overall impact of merit pay as a compensation policy. This review intends to respond to these challenges by examining the following four objectives: 1. To what degree do merit pay programs impact student achievement outcomes? 2. To what degree do merit pay programs impact teacher outcomes (e.g., retention, satisfaction)? 3. What are the distinguishing characteristics of the most successful merit pay programs? 4. For which subgroups of teachers/students/school systems are merit pay programs most or least beneficial?