Merit Pay System Issues: The primary purpose of merit pay systems is to re-establish the connection between measurable work output and vocational motivation on the part of the employee. In theory, workers who are rewarded for effort, efficiency, and productivity will be motivated to work harder, longer, and more conscientiously than workers who are rewarded exactly the same for mediocre work as for superior work (Russell-Whalling 2008)
Under the performance pay system, the market worth of individual jobs is also a feature. There's a greater demand for technical and network workers, so they might merit a higher proportion rate to replicate labor market and contributions (Brown, 2009)
If one pays high-performing employees more than low-performing ones, the high performers will remain and keep performing at a high level, while the low performers will leave or have inducement to get better. And it can function like that, if workers understand precisely what it takes to receive an elevated raise, if there are no other aspect but performance in pay assessments, if there are adequate finances to pay out considerable differences in raise quantities, and if supervisors have the confidence to be truthful, and stand up to emotional stress (Colter, 2003)
In California, twenty percent of the classroom teachers are un-credentialed because not enough people are willing to go through the education, testing and credentialing course for a job that offers so little in financial reward, so little in admiration and so few occasions for advancement. Until teachers are paid a wage commensurate to their qualifications, and have a real pool of professional teachers to choose from, the idea of merit pay is thought by some to be ludicrous (Devera, 2008)
"In contrast, there are teachers at the top of the pay scale who have not changed their teaching methods in 25 years to meet the needs of the kids they work with presently. This sentiment is echoed by a lot of supporters of merit pay who believe the way teachers are paid and how much they are paid must differ if districts are to attract a new cohort of teachers" (Drevitch, 2006)
Merit pay plans have been put into practice in a lot of places and the idea has been around for a lot of years. Yet, there is astoundingly little confirmation of their efficiency in increasing student achievement (Eberts, Hollenbeck & Stone, 2002)
And while districts or schools across the nation have tested plans linking bonus money to student achievement, teachers are still assured their yearly pay raises as called for by their contracts. That won't be the way it works in Ohio under the new law, frequently known as Senate Bill 5, which gets rid of salary schedules and step increases for Ohio's one hundred and ten thousand full-time public school teachers in favor of a straight merit pay system paid for at the local levels (Fields, 2011)
"The best and fairest way to measure this growth is through a statistical tool called value-added measurement, which is championed by economists who study the teacher labor force. Value-added equations attempt to control for factors such as class size, years on the job, and students' race and poverty while measuring how much of an impact teachers have on kids" (Goldstein, 2010)
Nonetheless, after a lot of years of use and a great deal of study, there is little hard substantiation that performance assessment programs bring out the preferred effects. Actually, linking performance evaluations to merit increases may be merely a waste of time (Gray, 2002)
By giving people no inducement to perform good work; they will likely fail to deliver a good service to the people for whose benefit the agents are supposed to work. On a philosophic basis, it breaches the standard of social justice, namely, that those who work harder, more productively, and more thoroughly should be compensated more than those who don't (Jason, 2011)
Second, gauging merit in teacher work is not simple. There are numerous variables that can affect student achievement in school, including: superiority of prior schools, level of parents' educational accomplishment, family earnings, student well-being, socioeconomic position of one's community, level of crime in the neighborhood, level of financial support of the school, parental participation in the child's education, excellence and existence of extracurricular and academic enhancement activities and support for teacher professional growth (Koebler, 2011)
In fact it has been discussed for over forty years in the area of education. The National Education Association (NEA) obstinately contests merit pay, but there is thinking that it is an idea whose time has come (Lewis, 2011)
Merit pay has had varied victory when simply taking into consideration increases in test scores. There have been cases where merit pay has been linked to superior test scores, but others in which the guarantee of merit pay has had no concrete force (Mooney, 2011)
In 1999, Cincinnati ran a ten-school pilot program which utilized peer and administration assessments on class preparation and presentation precision, and with these assessments teachers were placed into five salary groups. While originally faced with resentment from the teacher union, the victory of the pilot persuaded the union members to adopt the program in 2000" (Wann, 2009)