Incentives, Performance, and Schools case study.

Like organizations in other industries, the Houston Independent School District (HISD) believed it could direct, motivate, and improve performance with monetary rewards. The goal was to improve the skills and test scores of students at 40 underperforming schools.

Officials thought the underlying reasons for the underperformance were low performing teachers, as those at the target schools were twice as likely to be rated ineffective or needs improvement than in well-performing schools. Worse still, teachers at these same schools were half as likely to be rated highly effective. School district leaders reasoned that offering money$5000 signing bonuseswould attract better teachers to the poor performing schools.

Officials spent nearly $7 million to incentivize highly rated teachers to move to the target schools in the 201718 school year, and they planned to spend a similar amount in 20182019. But there was a problemit didnt work. The 40 schools experienced tremendous turnover4060 percent of teachers at worst schools quitbut the teachers who replaced them had nearly identical (poor) ratings when they arrived.

This left officials scratching their heads. The dismal results might have been due to the fact they had no performance criteria for teachers to qualify for the bonus and move to one of the 40 schools. Moving to the worst performing schools could be perceived as very risky, as highly rated teachers performance could drop in a more challenging, underperforming school. Adding to the risk, some teachers would presumably be giving up a position at a better school. Of course, it also was possible $5000 just wasnt enough for many.

Apply the 3-Step Problem-Solving Approach Step 1: Define the problem HISD officials wanted to fix. Step 2: Identify the potential causes of this problem. (Consider also the common reasons rewards fail to motivate.) Step 3: Make your recommendations.