Show Who the Money? Teacher Sorting Patterns and Performance Pay across U.S. School Districts

• Author: Michael Jones,Michael T. Hartney
• DOI: http://doi.org/10.1111/puar.12789
• Published date: 01 November 2017
• Date: 01 November 2017

Public Administration Review,

Vol. 77, Iss. 6, pp. 919–931. © 2017 by

The American Society for Public Administration.

DOI: 10.1111/puar.12789.

Show Who the Money? Teacher Sorting Patterns and Performance Pay across U.S. School Districts 919

Michael T. Hartney is assistant

professor in the Department of Political

Science at Boston College. He studies

education politics and policy, the interplay

between political and educational

inequality, and the workings of American

political institutions more generally.

Email: michael.hartney@gmail.com

Michael Jones is assistant professor,

educator, and academic director for the

master of science in applied economics

program at the University of Cincinnati. His

research interests include labor economics,

public economics, and the economics of

education.

Email: m.jones@uc.edu

Abstract : Pay for performance ( PFP) remains one of the most controversial policy debates in the New Public

Management reform era. Skepticism about PFP in the public sector is often grounded in theories of public service

motivation that suggest a misalignment between PFP’s focus on extrinsic market-based pay incentives and intrinsically

motivated government workers. Frequently missing from this analysis, however, is any consideration for whether PFP

leads to positive “sorting” effects on the composition of a government agency’s workforce through attraction, selection, and

attrition processes. Using data from two waves of the Schools and Staffing Survey, the authors examine whether PFP

influences the sorting patterns of K–12 public schoolteachers across U.S. school districts. Findings show that, on average,

school districts that adopted PFP secured new teacher hires who had graduated from colleges and universities with average

SAT scores that were about 30 points higher than the new teacher cohorts hired by districts that did not adopt PFP.

Practitioner Points

• Public sector employers should give greater consideration to how compensation policies such as pay for

performance (PFP) affect the attraction, selection, and attrition of the employees they desire to recruit and

retain.

• PFP programs can also influence the quality of prospective employees that a public agency is able to attract

and hire.

• PFP programs not only appear to influence the sorting patterns of prospective (early-career) employees but

also are associated with the sorting of higher-quality veteran employees.

I n recent years, both policy makers and practitioners

have shown renewed interest in pay for

performance (PFP) in the public sector (Bowman

2010 ; Perry, Engbers, and Jun 2009). For example,

Presidents George W. Bush and Barack Obama both

voiced support for PFP for federal workers, with Bush

spearheading initiatives to inject incentive pay into

the Departments of Defense and Homeland Security

(Kellough, Nigro, and Brewer 2010 ; Losey 2009 ;

Stazyk 2012 ). Notably, support for experimenting with

PFP in the public sector has been robust and bipartisan

in the K–12 public education arena (Honawar 2007 ).

President Bush’s Teacher Incentive Fund grants and

President Obama’s Race to the Top program made

significant financial incentives available to states and

school districts willing to experiment with PFP for

public elementary and secondary schoolteachers.

This flurry of policy-making activity has, in

turn, prompted researchers to “go back to the

future” to revisit questions about the feasibility

and overall efficacy of PFP in the public sector

(Perry, Engbers, and Jun 2009 ). To date, however,

public administration scholars have focused almost

exclusively on investigating whether and how

PFP influences individual employee effort and, by

extension, aggregate organizational performance

outcomes (Houston 2009 ; Ingraham 1993 ; Kellough

and Lu 1993 ; Kellough and Nigro 2002 ; Stazyk

2012 ). Existing studies are thus overwhelmingly

concerned with understanding the interplay between

PFP and public service motivation, with careful

attention paid to whether PFP reforms serve to

“crowd out” intrinsic motivation among public

employees by privileging extrinsic rewards (Frey 1997 ;

Frey and Osterloh 2005 ; Houston 2009 ; Moynihan

2008 ; Weibel, Rost, and Osterloh 2010 ).

Although studying PFP programs through the lens of

public service motivation has contributed significantly

to public administration and public management theory

(Perry, Mesch, and Paarlberg 2006 ; Perry and Wise

1990 ), existing research does not adequately examine

whether PFP influences the quality of employees

that government agencies are able to attract and hire

on the front end. As Gerhart and Rynes explain in

their comprehensive review of PFP effects (mainly in

the private sector), PFP has a sorting effect “on the

Michael Jones

University of Cincinnati

Michael T. Hartney

Boston College

Show Who the Money?

Teacher Sorting Patterns and Performance Pay across

U.S. School Districts