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Making Money Matter: Financing America's Schools
Recognition, Rewards, and Sanctions
Rewards for effective schools can take the form of public recognition or cash bonus for effective schools or teachers and staffs within the schools. While views about the importance of the financial awards differ, two concerns about them arise. One is that if they are large, they may encourage teachers and others to go to inappropriate lengths to win awards, including, for example, outright cheating, examples of which have been found in both Kentucky and Dallas. Other less nefarious changes in behavior may ultimately have even greater consequences. For example, to the detriment of low-performing schools, the existence of financial bonuses provide good teachers at those schools new financial incentives to transfer to a school where they are more likely to win an award.
If financial rewards are part of the program, the experience from several states suggests that they be funded by a reliable funding source. If the funding is subject to an annual appropriation, teachers may be skeptical about whether it will continue to be available (see the example of Kentucky in Elmore et al., 1996). The history of funding of such programs in other states does not bode well for teachers' confidence that funds will be forthcoming in the future. For example, both Indiana and Texas included funding in their programs in the early 1990s but both have now eliminated funding for teacher bonuses.
Potentially even more significant than the positive recognition and financial awards for effective schools is how the state or district treats the poorly performing schools. Accountability programs typically include both intervention strategies and sanctions for such schools. The experience from the various states suggests that state policy makers have more work to do in determining the best approach for dealing with the low-performing schools that are identified by the accountability systems. Sanctions will work only to the extent that fear of being sanctioned forces schools to improve their performance before they are sanctioned. The application of sanctions after the fact is problematic in that it may hurt the students as much, or more than, the personnel being sanctioned. Technical and financial assistance may be able to improve school performance in some cases, but it is unlikely to be helpful in all.
Will Such Incentive Programs Increase Student Achievement?
There is no simple answer to this question, although three types of research shed some light on the issue. First is evidence from the experience with similar incentives from the private sector, which shows that programs should not be viewed as a substitute for good management, which includes ensuring that teachers have the capacity to perform their jobs and providing a positive work environment. In addition, empirical evidence from the private sector is neither solid enough to conclude that financial incentives generate large increases in produc-