Performance-based Compensation Systems and Principal Job Performance

• In Event: Excellence in Education Research: Early Career Scholars and Their Work

Abstract

This study investigated the impact of performance-based compensation systems (PBCS) on principals’ job performance in Tennessee using longitudinal administrative data obtained from the Tennessee Department of Education via the Tennessee Education Research Alliance and unique PBCS information collected from school districts. It used a recently developed difference-in-differences estimator to identify the impact. It also analyzed the mechanisms using Bryk et al.’s (2010) essential support framework for school improvement. A preliminary analysis found that PBCS raised principals’ overall evaluation scores by 0.17 standard deviations, which appears to have been primarily driven by an increase in their scores in student growth. On the other hand, the analysis found a null relationship between PBCS and evaluation scores in leadership practices. To understand the mechanism, the study examined intermediate school-level outcomes depicted by the framework, including relational trust, teacher quality, and teacher recruitment and retention. It found similar patterns. PBCS increased teachers’ overall evaluation scores primarily driven by their scores in student growth. PBCS did not affect teacher quality through recruitment or retention efforts. Although these results are still preliminary and subject to change, as the methods and samples are refined, they add new empirical evidence to the currently limited literature on the relationship between financial incentives and school principals. These results and final results, which will incorporate the amount of financial incentives and equity aspects into the analysis, may inform state and district policymakers of the effective design of PBCS and its usefulness in addressing the inequitable distribution of school leaders.

Author

• Hajime Mitani, Rowan University