The Relationship Between Student Achievement, Teacher Effectiveness, Merit Pay, and Selective Teacher Demographics in a Rural School District

Teacher merit pay has become popular among policymakers to meet accountability mandates related teacher effectiveness and student achievement. Legislation at the federal level has provided grants and financial incentives to state and local districts to implement merit pay plans. In 2013, Tennessee required all districts to develop a differentiated compensation plan by revising an earlier differentiated compensation policy from 2008. With more rigorous standards and testing at the forefront of education reform in Tennessee, the rural school district in this study developed a strategic compensation plan with bonus pay based on student test scores as one of the components. The purpose of this causal-comparative study was to examine the effect of teacher merit pay levels on teacher effectiveness and student achievement within a rural school district. The study also will consider if there is a difference among the teacher effectiveness levels and student achievement scores and certain moderating variables including content area, years of experience, gender, and education level. The participants involved in this study were teachers and students of English I, English II, Algebra I, and Algebra II of the only high school in the district. Chi-square analysis found that higher teacher effectiveness may have a positive relationship with higher bonuses. One-way ANOVA analysis determined student achievement scores were significantly lower when the teacher did not qualify for a bonus than at any and every other bonus level. Linear regression analyses found significant moderation effects for years of experience, education level, and content area, but not for teacher gender. The study highlights the need for conclusive evidence in support of merit-based pay before leaders expand upon the compensation plan. Keywords: merit pay, performance pay, incentive pay, student achievement, accountability, teacher evaluation, teacher effectivenes