Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 10: Problem 23

School districts in many states experiment with plans that compensate teachers partly based on classroom performance, rather than their years on the job and coursework completed. Working with mentors to improve their instruction and getting bonuses for raising student achievement encourages efforts to raise teaching quality. How does "merit pay" attempt to cope with the principal-agent problem in public education?

Short Answer

Expert verified
Merit pay addresses the principal-agent problem in education by aligning teacher incentives with student achievement through performance-based compensation, mentorship, and bonuses.

Step by step solution

01

Understanding the Principal-Agent Problem

The principal-agent problem occurs when one party (the agent, i.e., teachers) is expected to act in the best interests of another party (the principal, i.e., school districts), but there are potential conflicts of interest.
02

Identifying the Issue in Education

In public education, the issue arises because teachers (agents) might not always align their efforts with the goals of the school districts (principals), such as improving student outcomes.
03

How Merit Pay Works

Merit pay, or performance-based compensation, rewards teachers based on their classroom performance and student achievement, rather than just their experience or education level.
04

Aligning Incentives

By tying compensation to student achievement, merit pay aligns the interests of teachers with the goals of the school districts. It provides a financial incentive for teachers to improve their teaching methods and outcomes.
05

Role of Mentorship and Bonuses

Mentorship programs and bonuses for improved student performance further support the goal of raising teaching quality. Mentors help teachers develop better strategies, and bonuses reward successful implementation of these methods.
06

Connection to Principal-Agent Problem

Merit pay addresses the principal-agent problem by creating a direct link between teacher performance and student outcomes, ensuring that teacher interests are better aligned with those of the school district.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

Key Concepts

These are the key concepts you need to understand to accurately answer the question.

principal-agent problem
The principal-agent problem happens when one entity (the agent) is supposed to act on behalf of another entity (the principal), but their interests might not always align. In education, teachers (agents) are expected to work towards the goals of the school districts (principals). However, teachers might sometimes prioritize their own interests, like job security, over improving student outcomes. This misalignment can lead to inefficiencies and unmet educational goals. When the school's success depends on high student achievement, any diversion from this goal can create challenges.
performance-based compensation
Performance-based compensation, also known as merit pay, is a system where teachers receive financial rewards based on their classroom performance and student achievement. Instead of being paid solely based on their years of experience or highest degree obtained, teachers earn bonuses or higher salaries when they meet certain performance metrics. This approach aims to motivate teachers to enhance their teaching methods and strive for better student results. Through performance-based compensation, the school district can incentivize behaviors that directly contribute to student success, aligning teacher efforts with educational goals.
teacher incentives
Teacher incentives are various rewards and recognition strategies used to motivate teachers to improve their performance. These incentives can include:
  • Bonuses for high student achievement
  • Opportunities for professional development
  • Recognition awards for excellent teaching
  • Additional resources for classroom improvement
By providing these incentives, schools aim to encourage teachers to adopt innovative teaching practices and maintain a high level of commitment to student learning. Effective teacher incentives can help bridge the gap between teacher efforts and the educational goals set by the school districts.
student achievement
Student achievement refers to the measurable academic progress that students make in school. It is often assessed through standardized tests, grades, and overall educational performance. High student achievement is a primary goal for school districts as it reflects the quality of education provided. Merit pay connects teacher compensation directly to student achievement, encouraging teachers to focus on effective teaching strategies that boost their students' learning outcomes. When schools prioritize student achievement, they support a culture of excellence and continual improvement.
mentorship programs
Mentorship programs are initiatives where experienced educators provide guidance and support to less-experienced teachers. These programs aim to enhance teaching quality through:
  • Sharing effective teaching strategies
  • Offering feedback on classroom management
  • Helping teachers set and achieve professional goals
  • Fostering a supportive teaching community
Mentorship can be particularly valuable in a merit pay system by equipping teachers with the skills and techniques needed to improve student achievement. Pairing mentors with newer teachers promotes a continuous improvement cycle and contributes to overall educational success.

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Two leading design firms, Astro Studios of San Francisco and Hers Experimental Design Laboratory, Inc, of Osaka, Japan, worked with Microsoft to design the Xbox 360 video game console. IBM, ATI, and Sis designed the Xbox 360 's hardware. Three firms Flextronics, Wistron, and Celestica- manufactured the Xbox 360 at their plants in China and Taiwan. Describe the roles of market coordination and coordination by firms in the design, manufacture, and marketing of the Xbox 360.

Precision agriculture will become commonplace on farms. It will include the use of self-driving machinery and flying robots to automatically survey and treat crops. a. Assume that using self-driving machinery for agriculture requires fewer farmers and less time. Is using self-driving machinery technologically efficient? b. What additional information would you need to be able to say that switching to self-driving machinery is economically efficient for agriculture?

Use the following data to work. Four methods of completing a tax return and the time taken by each method are with a \(\mathrm{PC}, 1\) hour; with a pocket calculator, 12 hours; with a pocket calculator and paper and pencil, 12 hours; and with a pencil and paper, 16 hours. The \(\mathrm{PC}\) and its software \(\cos t \$ 1,000,\) the pocket calculator costs \(\$ 10,\) and the pencil and paper cost \(\$ 1\). Which method is economically efficient if the wage rate is (i) \(\$ 5\) an hour, (ii) \(\$ 50\) an hour, and (iii) \(\$ 500\) an hour?

Starbucks has more than 10,000 employees, 6,700 stores, which serve some 50 million customers in 51 countries each week. Geoffrey mwa Ngulumbi runs the family-owned fair trade farm in Tanzania and supplies Starbucks with coffee beans and other raw materials. a. How does Starbucks coordinate its activities? Is it likely to use mainly a command system or an incentive system? Explain. b. How do you think Geoffrey mwa Ngulumbi coordinates the activities of his farm? Is he likely to use mainly a command system or also to use incentive systems? Explain. c. Describe, compare, and contrast the principalagent problems faced by Starbucks and Geoffrey mwa Ngulumbis farm. How might these firms cope with their principal-agent problems?

Joe, who has no skills, no job experience, and no alternative employment, runs a shoeshine stand. Other operators of shoeshine stands earn \(\$ 10,000\) a year. Joe pays rent of \(\$ 2,000\) a year, and his total revenue is \(\$ 15,000\) a year. Joe spent \(\$ 1,000\) on equipment, which he used his credit card to buy. The interest on a credit card balance is 20 percent a year. At the end of the year, Joe was offered \(\$ 500\) for his business and all its equipment. Calculate Joc's opportunity cost of production and his economic profit.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free