Many educators as well as business and governmental leaders argue that the improvement of schools depends primarily upon improving the performance of teachers. Merit pay, a solution drawn from the business world, promises to reward effective teachers and encourage them to work harder. From her perspective as both historian and policy analyst, Susan Moore Johnson explains that merit pay is neither a new nor an untested remedy. The speeches and programs of educational reformers of the 1920s and 1950s echo the current hopes for and arguments against merit pay. An analysis of the reasons for the failure of past merit pay plans suggests that present proposals would face similar technical, organizational, and financial obstacles. Asserting that merit pay takes into account neither the motivational needs of teachers nor the interdependent nature of schools, Johnson concludes that when looking to the corporate world for models of reform, school leaders should consider the practices of highly successful corporations which emphasize group goals over individual incentives.

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