Pay for performance is a bad investment

July 20, 2008|By LLOYD "PETE" WATERS

"Teacher pay set by the results" was the headline of a (Baltimore) Sun article I read the other day which suggested that "performance-based bonuses (were) cropping up across Maryland" in our state education system. Bonuses would be given to teachers and principals that were successful in raising test scores of students.

In theory, I suppose that "pay for performance" makes sense. In reality, however, I suspect it's a bad investment.

There seems to be an uncanny supposition that you can pay your good employees more based on the results they get and avoid any sort or rewards for your less than desirable employees. This may work well when you are picking apples, but I'm not sure pay for performance works as well in other arenas.

I can recall vividly the "pay for performance" system instituted by the state of Maryland before my retirement in 2003. It was a system that was created to reward your better employees by offering them a financial incentive ($500 to $1,000) for those employees who outperformed their peers.


One of the many shortcomings of the program was that job duties were often not well defined, and favoritism was difficult for most supervisors to avoid. Not many of the employees had much good to say about the system. I suspect they are still mired in the deep hole of bureaucracy that attempts to defend a flawed system.

There were many "superior" ratings given to employees that seemed to be given based on few if any documented objectives and results. The school process would use test scores as one of the evaluators.

The "pay for performance" system was quite divisive and not readily accepted throughout the system. Because of economic issues, the pay incentive was actually terminated and the system was left with a laborious, paper-intense process that has little "real" contributing impact on performance.

How exactly a "performance-based" system with bonuses and fiscal rewards would work in a school setting, in my opinion, would be suspect as well.

Would teachers reap less results and financial gain in those systems and communities where parents do not have the same interest in their kids as other communities? Would teachers reap a fiscal reward for better results in those communities that are affluent and wealthier than other communities? Would teachers be more interested in short-term results and test scores to get a pay raise and avoid those lessons that have an impact on a student far beyond a text book and a test score?

Not so long ago, an American by the name of W. Edwards Deming had the major responsibility of helping to rebuild the Japanese economy after the second World War.

His successes probably were unparalleled in any other modern economic community. America had little appreciation for Deming's management principles until he actually put them to work.

Today, the Toyota car maker is the No. 1 vehicle manufacturer in the world. I suspect some of Deming's economic principles and his theories have contributed to this success.

One of his economic principles suggests to us that in a business or entity that "quality is everyone's responsibility."

Can you imagine what the world might look like if that principle alone were applied to our government agencies, to our business world, to Verizon, to our cable companies, to our grocery stores, to every place that we did business? "Quality is everyone's responsibility."

Can you imagine a world of the future like yesteryear in which a business that serves the customer is concerned about the "quality" of one's work?

Deming specifically considered "performance appraisals, merit ratings and annual reviews" as one category under the heading of Seven Deadly Diseases of Management.

He thought that the notion of "teamwork" was destroyed by these evaluations. Deming further believed that the morale of the organization suffered because of these individual evaluations.

He had little use for them and actually believed them to be counter productive to the overall mission of the business. I tend to agree with that evaluation.

Anyone who has experienced any of the above evaluations can vividly give you a list of reasons to oppose the "pay for performance" programs now touted by many companies, and local, state and federal governments.

Our school system might benefit from a more thorough review of pay for performance principles before implementation.

Although "pay for performance" seems to be the management buzzword of our current, modern-day society, I am not convinced that it will serve our school system any better than it has served other systems to include local, state and federal governments.

As a customer, I think it is time you are given the opportunity to rate the performance of those people given the task of serving you to include our school system. Let's not forget those words of Deming, "Quality is everyone's responsibility."

Lloyd "Pete" Waters is a Sharpsburg resident who writes for The Herald-Mail.

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