Does strategic human capital management impact teacher mobility and student achievement? Evidence from three years of implementation in one Texas school district

Many public school districts around the nation have implemented performance pay programs to provide teachers the opportunity to earn additional pay based on measures of student achievement. These programs aim to improve student achievement and teacher effectiveness. Existing research on performance pay demonstrates no positive impact of such programs on student and teacher outcomes; however, little research assesses the impact of performance pay combined with addition supports and working condition improvements on student achievement and teacher effectiveness.

This study empirically examined the impact of teacher performance pay combined with additional human capital improvements on student growth and teacher mobility in one Texas school district. The district implemented the program in only 15 of the district’s 144 schools. Nine schools implemented the full intervention, which included performance pay, teacher supports, and working condition improvements, while six schools partially implemented the program, offering teachers the opportunity to earn performance pay only.

Results demonstrate that student growth was significantly, positively related to full program implementation in math and reading; yet, the magnitude of the results was small. Over time, teacher effectiveness increased on campuses that implemented the most comprehensive version of the program. Average teacher turnover rates increased on full program campuses the year before and the year after implementation; yet, the most effective teachers remained on campuses that provided performance pay and improved working conditions. Results suggest that financial incentives combined with additional human capital improvements, rather than financial incentives alone, could lead to small improvements in student achievement and teacher effectiveness in high need, urban public schools. These findings hold implications for policymakers and researchers, providing evidence on how to best design and implement school district human capital initiatives that show promise in improving student and teacher outcomes.