Answer: There are several reasons why it is not a good idea for school districts to offer financial incentives to high performers in schools in the United States. Some of these reasons are:
Financial incentives may not be effective in motivating students to achieve or exhibit certain behaviors correlated with student achievement. According to a study by Fryer (2011), the impact of financial incentives on student achievement was statistically zero in three cities where different incentive schemes were implemented. The study suggested that students may lack the structural resources or knowledge to convert effort to measurable achievement, or that the production function may have important complementarities out of their control, such as effective teachers, engaged parents, or social interactions.
Financial incentives may undermine the intrinsic motivation of students to learn and enjoy the process of education. According to the self-determination theory, intrinsic motivation is driven by three psychological needs: autonomy, competence, and relatedness. Financial incentives may interfere with these needs by reducing the sense of autonomy and self-determination, by creating a contingent and external evaluation of competence, and by weakening the social bonds and trust between students and teachers.
Financial incentives may create unintended and undesirable consequences, such as cheating, gaming, or narrowing the curriculum. For example, a study by Levitt and Dubner (2005) found that some teachers in Chicago manipulated test scores by changing students’ answers or giving them hints during the test, in response to a high-stakes incentive program. Another study by Jacob (2005) found that some teachers in Chicago excluded low-performing students from testing, taught to the test, or reduced instruction time on non-tested subjects, in order to improve test scores under an accountability system. These behaviours may compromise the validity and reliability of the test results and the quality and breadth of education.