An airline wants to compete in the low-cost, low-frills segment of the market, where maximizing productivity and efficiency are critical. The company rejects merit pay. Can it succeed?
If you've flown Southwest Airlines, you already know the answer. Rather than emphasize exclusive rewards, Southwest thrived by sharing ideas, building a strong, unified corporate culture, and – here's a radical notion – encouraging workers to help one another.
Many of the assumptions about compensation in the private and public sector are misleading and incorrect. The result is that political leaders adopt misguided pay policies. The Teacher Incentive Fund now being implemented by the Bush administration is one of them.
This month, the Department of Education disbursed the first $42 million for the program that will tie teacher pay to test scores and classroom evaluations. In Florida and Texas, policymakers hope that an end-of-year cash bonus for teachers will translate into student success.
For all the flaws in this idea, a bigger issue is at stake – the inability of lawmakers to resist political fixes that divert attention from addressing the root causes of the problem.
The strongest incentives for teachers and all working people are competitive salaries and good working conditions. In a 2006 MetLife survey, one in four teachers cited low salaries and a lack of control over their own work as the primary reasons they will probably leave their jobs within the next five years. Those who were driven to abandon teaching altogether cited frustration with the lack of professional prestige, or with principals who did not ask for their suggestions, did not show appreciation for their work, and did not treat them with respect.
Bonuses cannot substitute for a working environment high on trust and meaningful work. And incentives cannot replace a perverse pay scale in which the average earnings of workers with at least four years of college are now more than 50 percent higher than the average wages of teachers.
But there is a better model. Pay teachers for the knowledge and skills they gain. Compensate teachers who agree to mentor newer colleagues. Offer incentives to teach in hard-to-staff schools. Provide group incentives that offer teachers the opportunity to gain greater autonomy and discretion in all school matters.
That's what helped Connecticut turn its struggling schools around a few years back. Today, Connecticut consistently ranks above the national average in math and reading, a turnaround made possible by higher salaries for qualified faculty, increased licensing standards, and mentoring for all new teachers.
A 1998 Harvard Business Review article, which provided the Southwest example cited above, substantiates the proposition that enthusiasm for incentive pay far outpaces data supporting its effectiveness: "Despite the evident popularity of this practice, the problems with individual merit pay are numerous and well documented. It has been shown to undermine teamwork, encourage employees to focus on the short term, and lead people to link compensation to political skills and ingratiating personalities rather than to performance."
The key question for any teacher compensation system is whether it is designed to improve student learning or to advance short-term political goals. These efforts linking teacher pay to test scores are not part of any integrated strategy to raise student achievement. Instead they represent an oversimplified approach masquerading as school improvement.
Southwest refused to succumb to the myth that the most effective way to motivate people is through individual incentives, and it is the cost and productivity leader in its industry.
Don't let policymakers reduce teaching to the Darwinian philosophy of survival of the fittest. Instead, demand of them the judgment and courage necessary to reform teacher quality at its core.
• Reg Weaver is president of the National Education Association, which represents 3.2 million public school teachers and other educators.