U.S. Department of Education

Policy and Program Studies Service

Results in Brief:

Teacher Incentive Fund: Final Report on the Implementation of 

Performance Pay Systems by the First and Second Cohorts of Grantees

June 2016

The Teacher Incentive Fund (TIF) was first authorized in 2006 to support efforts to develop and implement performance-based 

compensation systems for teachers and principals in high-need schools. The authorizing statue specifies that grantees’ performance 

pay systems are to provide incentives based on gains in student academic achievement, classroom evaluations, and other factors

and to provide educators with incentives to take on additional responsibilities and leadership roles.

This study examined program implementation in the first two cohorts of grantees (2006 and 2007), a total of 33 grantees. All 33 

grantees implemented performance pay systems for principals and other school administrators (“principal projects”); 31 grantees 

also included teachers in their performance pay systems (“teacher projects”). The grantees examined in this study made awards to 

educators based on a number of other factors in addition to those listed in the legislation, such as performance evaluations (which

could include classroom observations, reviews of lesson plans, and feedback from peers and students); supports for improving 

practice such as mentoring, coaching, and participating in professional development; and incentives for teaching in hard-to-staff 

schools or subjects. Because the TIF program continued to evolve after the first two cohorts, the grantees studied in this report were 

responding to somewhat different (and generally more flexible) program requirements than were later cohorts of grantees. 

STUDY QUESTIONS

1. How did the size and distribution of incentive 

awards vary across educators and grantees?

2. To what extent were incentive payments based 

on student achievement or based on other 

factors such as supports for improving practice, 

performance evaluations, and teaching in hardto-staff schools or subjects?

3. How did participating educators perceive the 

fairness and effectiveness of the performance 

pay systems?

STUDY DESIGN

This study examined program implementation in the 

first two cohorts of grantees (2006 and 2007), a total

of 33 grantees. This report is based on surveys of 

teachers and principals conducted in spring 2011 and 

an analysis of incentive award payouts, primarily for 

the 2010–11 school year. Survey response rates were 

87 percent for the teacher survey and 74 percent for 

the principal survey. Thirty-one of the 33 grantees 

provided payout data; 28 of these provided data for

2010-11 and three provided data for 2009-10.

A previous report (2012) provided information on 

early implementation for these grantees based on an 

earlier round of payout data, interviews, and extant 

documents.

Highlights

 Across all educators who received an incentive award, 

the average award was $3,651 for teachers and $5,508 

for administrators. These average awards represented 

approximately 8 percent of average teacher salaries 

and 6 percent of average principal salaries.

 Within grantees, the average teacher award ranged 

from $1,170 for the grantee with the smallest average 

award to $8,772 for the grantee with the largest 

average award (2–24 percent of average salaries), and 

the average administrator award ranged from $814 to 

$10,711 (1–13 percent of average salaries).

 Awards for student achievement gains comprised the 

largest share of incentive payouts to teachers and 

administrators; 64 percent of teacher award payouts 

and 63 percent of administrator award payouts were 

based on student achievement.

 Smaller proportions of incentive payouts were 

based on performance evaluations (13–14 percent), 

participation in supports for improving practice (12–14 

percent), and working in hard-to-staff schools and 

subjects (6–12 percent).

 Teachers were less likely than principals to agree that 

their performance pay system was fair (46 percent vs.

64 percent). However, 55 percent of both teachers and 

principals agreed that the possible award size was 

large enough to motivate them to earn it.
SIZE AND DISTRIBUTION OF AWARDS

Incentive awards provided to teachers tended to be 

smaller than administrator awards in terms of absolute 

dollars but larger when viewed as a percentage of 

average base salary. 

 The average incentive award across all individual 

award recipients was $3,651 for teachers (8 percent 

of an average teacher salary) and $5,508 for 

administrators (6 percent of average salary).

 Most grantees provided average awards of between 

$2,000 and $5,999 (24 teacher projects and 18 

principal projects), but some provided average 

awards that were much smaller or larger (for 

teachers, as low as $1,170 and as high as $8,772). 

Individual incentive award amounts varied considerably. 

 For teacher projects, the grantee with the greatest 

range in their teacher incentive award amounts gave 

awards that ranged from $625 to $25,000, while the 

grantee with the smallest range gave awards that 

ranged from $2,000 to $4,000. 

 For principal projects, the grantee with the greatest 

range in their administrator incentive award 

amounts gave awards that ranged from $1,600 to 

$33,625, while the grantee with the smallest range 

gave awards that ranged from $800 to $1,000. 

 Across all award recipients, teacher award amounts 

ranged from $6 to $25,000, and principal award 

amounts ranged from $13 to $33,625. Looked at in 

relation to salary levels, the highest individual 

teacher award was 55 percent of average base 

salary and the highest individual principal award was 

41 percent of average base salary.

More than half of the grantees provided performance 

awards to almost all participating educators.

 In 19 out of 30 teacher projects and 19 out of 31

principal projects, over 90 percent of participating 

educators received a performance award. More than 

three-quarters of grantees provided performance 

awards to over half of all participants (23 teacher 

projects and 24 principal projects). 

 A few grantees provided awards to a much smaller 

proportion of participants: three grantees provided 

awards to 5 to 10 percent of participating teachers, 

and four grantees provided awards to 6 to 13 

percent of participating administrators.

 The grantees with the largest number of participants

were less likely to award incentives to all or most 

participants. As a result, 51 percent of all teacher 

participants and 49 percent of all administrator 

participants received incentive awards.

COMPOSITION OF INCENTIVE AWARDS

Awards for student achievement comprised the 

largest share of incentive payouts received by teachers 

and administrators, but incentive payments were also

based in part on performance evaluations, participation 

in supports for improving practice, and working in hardto-staff schools and subjects.

 Nearly two-thirds of teacher payouts (64 percent) 

and principal payouts (63 percent) were based on

student achievement. 

 Smaller proportions of incentive payouts were 

based on performance evaluations (13–14 percent),

participation in supports for improving practice (12–

14 percent), and working in hard-to-staff schools 

and subjects (6–12 percent).

EDUCATOR PERSPECTIVES

Teachers were less likely than principals to report that 

they understood their performance pay systems or that 

systems were fair.

 Fewer than half of participating teachers said they 

understood “well” or “very well” the activities or 

achievement for which they could earn incentive pay 

(44 percent) and how their work was evaluated for 

the performance pay program (35 percent).

 In contrast, 64 percent of principals said they 

understood the activities or achievement for which 

they could earn incentive pay, and 55 percent said 

they understood how their work was evaluated for 

the performance pay program. 

 Forty-six percent of teachers and 64 percent of 

principals agreed that their performance pay 

program was fair. Larger percentages agreed that 

the required formal evaluation they received was 

fair (82 percent of principals and 79 percent of 

teachers).

Teachers’ and principals’ perceptions of the effects of 

their performance pay systems on educator behavior 

sometimes differed.

 Over half of both teachers and principals (55

percent) agreed that the possible award size was 

large enough to motivate them to earn it.

 Seventy-one percent of principals and 52 percent 

of teachers reported that the performance pay 

project encouraged teachers to work harder.

 Sixty-seven percent of principals but only 39 percent 

of participating teachers agreed that teachers

altered their instructional practice as a result of

the performance pay project.