Incentives and Test-Based Accountability in Education (2011) / Chapter Skim
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2 Basic Research on Incentives
2 Basic Research on Incentives
Pages 13-36
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From page 13... ...
Although we use these two research literatures to structure our analysis, we also discuss some empirical results from economics, sociology, and personnel psychology where they are applicable. 1 Although the committee focused in particular on theoretical work from economics and empirical work from psychology, we recognize that this division is artificial since the re search in both fields includes complementary theoretical and empirical work.
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From page 14... ...
Sales commissions are one of the well-known ways in which piece rates are currently used in many industries. Empirical research has shown many situations in which simple piece rate incentives operate as the economic theory predicts (Prendergast, 1999)
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From page 15... ...
The difficulty in measuring the true results of what workers do is an important constraint in providing incentives -- and the difference between the available measures of workers' output and the true value of that output has consequences for the way incentives operate. In an attempt to provide appropriate incentives, organizations often look for performance measures to use in objectively quantifying what each worker is producing.
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From page 16... ...
In organizations seeking to find an appropriate incentives scheme, the performance measures used may evolve over time in the search for mea sures that are well aligned with the true value that the workers produce. For example, the Job Training Partnership Act of 1982 initially provided incentives for local employment and training centers that were based on job placement rates and the wages at the time of placement.
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From page 17... ...
A theoretical analysis shows that an optimal incentives scheme will place less weight on performance measures that are less aligned with the true value of what the workers produce (Baker, 2002)
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From page 18... ...
In education, one example of distortion occurs when teachers and students focus narrowly on tested material and ignore topics that are not covered on the tests. In evaluating an incentives system, it is important to evaluate, not whether distortion exists, but whether the incentives result in a sufficient increase in the output desired to justify the costs of running the incentives system, including the costs of monitoring the performance measures, providing the incentives, and addressing the unintended, negative effects.
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From page 19... ...
Systems that rely on subjective performance measures must have or must create incentives for the relevant authorities (e.g., principals) to act on their subjective assessments, while protecting the workers from arbitrary -- or even capricious -- evaluations.
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From page 20... ...
applies the theory to the case of incentives given to teachers -- in a model in which teachers differ in their effectiveness in raising student test scores -- and produces the result that incentives will cause some teachers to increase their effort and others to change occupations. In Lazear's model, this differential reaction would lead to increasing effectiveness in the pool of teachers over time -- as measured by the ability of the teachers to raise test scores -- because the ones who leave are those who are less able to respond effectively to the incentives.3 Similarly, economic theory suggests that incentives given to students -- such as high school exit exams -- will cause the students who have greater ability to pass the test, but can only pass it with increased effort, to increase their effort while causing the students who have less ability to pass the test to drop out (Betts and Costrell, 2001)
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From page 21... ...
A theoretical analysis shows that an optimal incentives scheme will place less weight on performance measures that are subject to greater uncertainty because they are subject to factors that the workers do not control (Baker, 2002)
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From page 22... ...
On the one hand, any measures of the work done by individual workers will miss their contributions to the work of the other team members and so will give an inaccurate assessment of that worker's total productivity. On the other hand, performance measures based on the productivity for the entire team will be very uncertain indicators of the performance of
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From page 23... ...
Whether it is better to provide incentives at the individual or team level in this situation depends on the relative importance of cooperation by the team members and the degree of uncertainty added by using a team performance measure (Baker, 2002)
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From page 24... ...
For example, explicit incentives for principals could lead to informal group incentives for teachers. At the same time, there are different actions available to the people who play different roles: principals can have a direct effect on hiring deci sions, but they can affect instruction only indirectly by working through teachers; teachers have a direct effect on instruction, but they can affect student effort and attention only indirectly by working through students.
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From page 25... ...
However, in many settings, calculations of the benefits of test-based accountability are likely to be grossly exaggerated if they take test score gains at face value and ignore score inflation and the invisible effects of deemphasizing important skills that are not included on the tests. When real learning gains are small, costs may exceed benefits even when test scores have increased substantially.
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From page 26... ...
. The finding that external rewards can undermine internal motivation was initially very controversial, seeming to contradict both conventional wisdom and a wide body of experimental research in psychology.
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From page 27... ...
Internal and External Motivation Deci and Ryan (1985) synthesized the large body of experimental work on human motivation in a theory that provides a framework for understanding the varying effects of external rewards.
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From page 28... ...
However, if a reward does not seem to be pressuring but instead simply signifies competence, it can have the intended positive effect. When people are told their performance is being evaluated, it is often experienced as controlling, and internal motivation may decrease even when positive evaluative information is subsequently provided (Harackiewicz, Abrahams, and Wageman, 1987)
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From page 29... ...
For example, many teachers try to improve student performance by systematically rewarding students who follow classroom rules with praise, gold and silver stars, or tokens exchangeable for prizes. 4 Grades and honor rolls are intended to recognize excellence in achievement, but they may come to serve as external rewards to motivate students to work hard.
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From page 30... ...
Evaluations would be expected to be most motivating when they provide relevant feedback in a noncontrolling way -- that is, by providing individuals with specific feedback that points the way to becoming more effective or more competent, but without pressure or control. Motivation research suggests that when evaluations are experienced as controlling, they may produce temporary compliance, but they ultimately undermine internal motivation and commitment to the activity.
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From page 31... ...
examined this effect in the context of a newly introduced school-based curriculum for elementary students across several schools. As would be predicted by the prior work, the results showed that teachers pressed toward higher standards were more likely to engage in controlling instructional behaviors, and the more they did so, the more poorly the students actually performed on the objective tests.
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From page 32... ...
-- it is important that the incentives structure be aligned with the mission of the organization. Chapter 4 discusses the evidence related to providing performance pay for teachers.
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From page 33... ...
It may be important to target direct incentives to the people who can make the changes needed to improve outcomes. Performance Measures The performance measures used with incentives have to be aligned with the desired outcomes for the incentives to have their desired effect.
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From page 34... ...
The research in economic theory discussed in this chapter also raises two important points related to evaluating the success of incentive sys tems, nonincentivized performance measures for evaluation and weigh ing costs and benefits. • Nonincentivized performance measures for evaluation: Incentives will often lead people to find ways to increase measured performance that do not also improve the desired outcomes.
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From page 35... ...
35 BASIC RESEARCH ON INCENTIVES ations we are likely to care about a broader range of outcomes than could be measured by available performance measures and rewarded by feasible incentive systems. With respect to these broader outcomes, it is important to know how incentives change the way people are disposed to act when they are not being directly affected by the incentives.
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