WHEN the children at Eminence Elementary School in rural Kentucky raised their scores on achievement tests recently, the school got a $13,000 cash reward.
The award was one of $25 million the state gave to local districts last year that saw improved student performance, and the school in Eminence, Ky., used it to give teachers, bus drivers, students, and even cafeteria workers small bonuses.
The move is emblematic of a growing trend in American education in which states are doling out cash rewards - and sanctions - to try to boost school performance.
The idea is gathering momentum in the South in particular, where many states rank low in national educational standards. Yet the move is also drawing criticism from some educators and academics, who see pay or punishment as a gimmick rather than a fundamental way to change education.
''The money really needs to be focused on creating a better classroom environment,'' says Phyllis Bursh, policy advocate at the National Center for Fair and Open Testing in Cambridge, Mass.
The proposals and programs in place for rewards and sanctions run the gamut, but most are tied to an individual state's assessment system that measures student achievement. Currently all but a few of the 50 states have adopted a method of determining performance standards and have set goals for meeting them.
In Kentucky, the monetary rewards are administered under the state's school accountability program, which was mandated in 1990 in an effort to reform education in the state. Schools are tracked by attendance, dropout rates, and a series of statewide achievement tests that measure skills in subjects ranging from math to reading.
The schools that improve get a check; those that don't are subject to a series of sanctions, which could include teacher probation, firing of principals, or even state takeover.
Other states experimenting with either rewards or sanctions include Connecticut, Hawaii, and Illinois. Yet much of the activity is below the Mason-Dixon line. For instance, Tennessee, Texas, Louisiana, and Mississippi include either penalties or payment or both.
The Maryland legislature is proposing an allocation of $5 million in rewards for schools that show improvement. Lawmakers in South Carolina, meanwhile, are pushing a bill that would fire principals in failing school districts and offer innovation money to schools where test scores continue to rise. North Carolina recently endorsed a program that would include rewards, but no money has been earmarked for it yet.
''The South tends to perform lower ... and policymakers are more anxious for ways to bring performance up,'' says Ed Roeber, director of student assessment programs at the Council of Chief State School Officers in Washington, D.C.
Experts say that because many of the reward and sanction plans are still relatively new it is too early to conclude how effective they have been in improving student performance. But those who administer the programs claim to have already experienced success.
Kentucky, for example, says student test scores have risen and that 92 percent of its schools are making progress toward their improvement goals for the 1994-96 years.
Critics, however, believe there are better ways to improve learning in the classroom.
''Punishment or cash may be a way of getting people excited, but it becomes more of a strategy on how to make a bonus or how not to get sanctioned,'' says Ms. Bursh. ''It really pressures teachers to put students they're afraid of not scoring well in special-ed classes or trying to find a way of exempting them.''
Is this any way to improve a school?
The reward programs are often more controversial than sanctions. While a growing number of states now award cash to schools, a few like Kentucky give the money to the school's staff, who can decide how to spend it. Often, they elect to give teachers bonuses - or put the money in the pockets of some students.
''People ask why we have to pay people extra money to get the performance they didn't provide in the first place,'' says Mr. Roeber.
It's still unclear whether states that are proposing rewards or sanctions will end up adopting them. As states are forced to tighten their fiscal belts, politicians may be reluctant to funnel money for cash awards, according to Lynn Cornett, vice president for state services at the Southern Regional Education Board in Atlanta.
Adds Chris Pipho, a spokesman at the Education Commission of the States in Denver: ''I've always found that even though a lot of these ideas weren't always going to go through it was the introduced legislation that was sort of the ... predictor of what [eventually] got enacted.''