NEW YORK

IN WHAT IS BEING HAILED as a dramatic move forward in education reform, New York City adopted a limited performance-pay program for its teachers last week.

The plan, which was supported by the city’s teachers’ union, will provide bonuses, to be distributed among teachers at low-performing schools that improve student achievement. Though the program is limited by its focus on schoolwide rather than teacher-targeted bonuses, research suggests that this reform holds promise for improving the nation’s largest public school district.

New York is the latest of several public school systems to experiment with a performance-pay program. Several similar programs are currently operating in areas as diverse as Florida, Minnesota, Denver, Nashville and Little Rock.

Under the current system, teachers’ salaries are nearly entirely determined by the number of years they have spent in the classroom and the number of advanced degrees that they have earned. Alas, a wide body of research shows that these two numbers are unrelated to students’ academic performance. The result is a compensation system that gives teachers an incentive to acquire degrees that do not make them better teachers and to stay in the classroom even if they are ineffective.

Performance pay provides school systems with a way to reward excellent teachers. These programs directly tie at least part of a teacher’s salary to student performance, as measured by standardized tests. Unlike the current, input-based system, performance-pay programs reward teachers for achieving the outcome in which parents and the public are most interested — student learning. These systems can encourage teachers to improve their classroom performance rather than acquire meaningless degrees.

Though we still have much to learn about the impact of performance pay on student achievement, so far the evidence is quite positive. My colleagues at the University of Arkansas and I recently found that a performance-pay program in Little Rock led to substantial improvements in students’ math proficiency. David Figlio and Lawrence Kenney have evaluated the impact of performance pay in school districts nationwide and found that it led to academic benefits.

However, though research suggests that New York’s program could be a step in the right direction, the design of the policy could limit its benefits. In particular, the program will bestow bonuses on schools whose students make academic improvements, and then a committee within each school will determine how to allocate the bonuses among teachers. The trouble with this system is that, unlike a program that rewards individual teachers for the gains made by their students, it may not give teachers incentives to improve their productivity. Likely, there will be pressure within schools to allocate bonuses evenly among teachers, regardless of whether all the teachers in a school are actually making a difference in their students’ lives.

Not only could providing bonuses to schools, rather than directly to teachers, reward some undeserving teachers, it could also fail to reward high-performing teachers who are unfortunately teaching in unresponsive schools. In even our poorest-performing schools there are undoubtedly some teachers who are making a positive difference in their students’ lives. Under the New York system, however, a teacher’s students could be making large academic gains, but the teacher wouldn’t receive a performance-pay bonus unless the entire school was making similar improvements. A better system would reward each excellent teacher regardless of her colleagues’ performance.

Despite its limitations, New York’s new performance-pay program could greatly improve its struggling public schools. The program better aligns the incentives of teachers with those of students, parents, and the public.

We will have to wait and see if the performance-pay experiment will be as positive in New York as it has been elsewhere. But the evidence so far suggests that providing teachers with bonuses for student achievement could significantly improve student learning.

Marcus A. Winters is a senior research associate at the Manhattan Institute.