While presented as a novel idea, educators have experimented with performance-based pay systems throughout the last century. These systems display a universal tendency to be abandoned after a few years. Performance pay is not the silver bullet for education. Teacher performance is a function of the culture of education, which cannot be altered by simply tinkering with rewards. Instead, the New Zealand government should focus on forging a trusting relationship with teachers and schools, channelling top graduates into education, and ensuring that all teachers receive regular developmental feedback and professional development.

The theoretical basis for the efficacy of performance pay systems is sketchy. Performance-based remuneration works well when the worker’s contribution can be reliably measured at low cost, workers know how to increase output, gaming the system can be prevented, and workers are motivated by financial rewards. None of these criteria appear to hold for the teaching profession. Test scores are an incomplete reflection of the thinking skills and character traits that we want teachers to pass on to children. Around the world, performance-pay has led to test-score manipulation, and teachers in performance-pay schemes tend not to cite it as a major source of motivation.

Evidence from implementation of performance-pay systems is unconvincing. Many US states toyed with primitive performance pay systems in the 1980s, only to abandon them after a few years. Other studies have found some positive relationship but are imperfect studies and don’t allow us to determine whether performance pay improves school performance, or whether good schools are more inclined to adopt performance-based pay. Some studies find that performance pay lifts maths scores but not reading. Others find the opposite. Still more find no improvement at all. Even in the private sector, studies have generally failed to show compelling evidence for the efficacy of performance-based pay (despite its ubiquity).

In fact, performance pay can lead to perverse outcomes beyond outright cheating. Performance pay can encourage a narrow focus on performance criteria, to the exclusion of unmeasured objectives. In any performance-based evaluation system, fairness is a continual concern. This is especially true of teaching where even the best measurements of teaching performance are subject to bias. Moreover, creating extrinsic rewards generally reduces innovation and can in some instances lower intrinsic motivation.

Part of the reason for the difficulty in assessing the efficacy of performance pay systems is the inseparable relationship between pay systems and the wider context and culture of the education system in which they are implemented. Like all people, teachers are motivated by more than just money and evaluation systems, what they do is influenced by their own skills and abilities, beliefs and attitudes, their relationships with peers, and school leadership. In short, the culture of the education system.

Interventions designed to influence culture typically fall into one of four categories: building understanding and conviction, raising skills and capabilities, aligning systems and processes, and leadership. Leaders typically overuse system and process-based interventions and put insufficient emphasis on the other categories. This helps explain why that where studies have found performance pay to be effective, the system was designed in conjunction with teachers and implemented with their support. This provides a further argument against the introduction of performance pay, given teachers’ strong aversion to it.

Given the mixed results and grass-roots opposition to performance-based pay, we would be better investing resources in less controversial and more effective interventions. Recent research by McKinsey & Company, a global consultancy firm suggests that education systems at similar levels of development to New Zealand's got the most benefit from programs that focused on implementing robust feedback and professional development resources for teachers and raising the status of teaching within the community.

Top-performing school systems tend to focus on improving professional development rather than increasing accountability. The goal of this feedback is to establish avenues for constant improvement and trigger peer-to-peer conversations about effective teaching. At present, professional development is at the discretion of local school leadership. New Zealand would do well to devote resources to developmental, peer assessment for all teachers on at least an annual basis. This feedback shouldn't aim to evaluate the competency of the teacher, but rather should aim to identify effective teaching methods and suggest areas for improvement.

Professional development will only get you so far. A teacher’s level of literacy, measure by vocabulary and other standardised tests, contributes more to teacher performance than any other observable characteristic. A world-class educational system is dependent upon getting the best university graduates into teaching. Yet top graduates are not flocking to become teachers. Part of this is because New Zealanders currently don't respect the teaching profession. Turning this around is a national marketing exercise that requires a portfolio of actions to boost the status of teaching as a profession. A compelling start is the work being done by TeachFirst. Based on a similar model in the UK that is the largest single employer of graduates from Oxford and Cambridge, TeachFirst is a competitive program that offers top graduates high-quality teacher training, ongoing mentorship, and partnerships with leading professional services firms to draw top graduates into teaching, initially for a two-year stint.

A dominant paradigm in modern education is that learning is much more than simply providing information and testing recall of the same. Teachers are called upon to inspire performance from their students. This same paradigm applies to engaging teachers themselves. We must come to see pay for what it is: just one element in a set of management practices. Instead of looking to a silver bullet we should set about inspiring the education system itself. Providing additional resources for peer-based professional development and supporting programs that raise the status of teaching itself are a step in the right direction.

*Robbie is a post-graduate student at UC Berkley