Skip to main content


Kozlowski, Karen Phelan & Lauen, Douglas L. (2019). Understanding Teacher Pay for Performance: Flawed Assumptions and Disappointing Results. Teachers College Record, 121(2), 1-38.


Background: Policy makers are increasingly adopting performance incentives to spur underperforming teachers as a way to improve teaching and student performance. However, much of the experimental research fails to find meaningful effects of performance incentives on either student achievement or teacher practice.
Purpose/Objective: Using the “principal–agent problem” as the theoretical motivation for the study, this research examines why performance incentives have not worked in American schools. The principal–agent problem suggests that in the absence of a perfect system to monitor agents, (e.g., teachers), there must be an incentive based on some measurable outcome to ensure maximal effort. The underlying assumptions about why performance incentives should work for teachers are that (1) teachers are primarily motivated by money, (2) teachers are not currently working hard enough, and (3) teachers know how to be more effective but are choosing not to put forth the necessary effort to do so. The purpose of this research is to examine whether these assumptions hold for teachers.
Research Design: We conducted qualitative analysis of interviews and focus groups with approximately 150 teachers and 20 administrators from 13 of the lowest performing school districts in North Carolina to understand how educators perceived performance incentives in the context of their own practice.
Findings: Three key themes emerged from our study. First, teachers report being motivated by service to their students instead of opportunities to maximize income. Second, teachers think they are already working as hard as they can and find little room in their practice to work harder, whatever the financial reward. Third, when teachers do improve their practice, it comes from opportunities to learn new strategies and techniques.
Conclusions: The empirical research presented in this paper suggests that performance incentive programs rest on a set of flawed theoretical assumptions. Performance incentives assume that teachers (1) are primarily motivated by financial rewards, (2) are not working as hard as they can, and (3) know how to be more effective. However, these assumptions do not comport with what teachers and administrators report about their motivation and practice. Therefore, performance incentives will likely do little to improve teacher effectiveness overall.


Reference Type

Journal Article

Year Published


Journal Title

Teachers College Record


Kozlowski, Karen Phelan
Lauen, Douglas L.