Study: Teacher retention bonuses result in lower turnover rates, higher test scores

Offering teachers a retention bonus to stay at low-performing schools may increase test score gains among students in both reading and mathematics, according to a new study.

Walker Swain, an assistant professor at the University of Georgia; along with researchers at New York University and the University of North Carolina, Chapel Hill, examined the effects of offering a one-time, $5,000 selective retention bonus to teachers at high-poverty schools in Tennessee.

"We initially found compelling evidence that top-rated teachers who received bonuses, especially reading and math teachers, were more likely to come back than near-top-rated teachers who just barely missed being eligible," said Swain, who teaches in the College of Education's department of lifelong education, administration and policy. "That sort of sharp eligibility cutoff is great for evaluation, but it also is an important reminder that differentiated pay can be pretty arbitrary."

In 2012, the Tennessee Department of Education designated $2.1 million from the federal Race to the Top Competition to a one-year pilot program, which offered the highest-rated teachers at Priority Schools—or schools that had the lowest test scores in the state—a retention bonus to decrease turnover rates and elevate student performance.

High-performing teachers who were offered retention bonuses received top scores on Tennessee's evaluation model, which includes principal observations in class, student perception surveys, reviews of prior evaluations, as well as student test score growth.

Those who received the bonuses were required to stay at their schools the following year. After the first year of the program, Swain and his colleagues evaluated the impact of the pilot program on both teacher turnover rates and later student learning growth in high-poverty schools. Of the 473 teachers who were eligible for the bonus, 321 were retained and paid the $5,000 bonus.

"What we saw on the math side was this increase in teacher retention initially, and then it goes back to normal, when the extra money goes away" said Swain, who was recently quoted on the study by Education Week. "On the reading side, you see an increase and then it drops off a little bit, but is still better. It's possible some of the stickiness of the effect could be that staying one more year increased the teacher's connection to the school."

Oftentimes, schools—particularly high-poverty schools—have a harder time retaining science, technology, engineering and math (STEM) teachers, since many of them hold advanced degrees in their subject areas, said Swain. Because of this, along with a general shortage of STEM teachers, the program's $5,000 retention bonus may not have been enough to keep these instructors from leaving.

Despite this finding, Priority Schools that participated in the bonus program saw a significant improvement in reading test scores among students compared to similar non-participant schools in subsequent years, even after the retention bonus was removed.

While impacts on math scores were only marginally significant, students still scored higher in this subject area in the years following the bonus distribution.

"Part of what we try to do as policy analysts is to think about this program, its core underlying theory and whether it worked," said Swain. "In this case, we can say the underlying theory worked, but we're seeing some limits."

The turnover rates of effective teachers at high-poverty schools are nearly double the rate of similar teachers at low-poverty schools, and if schools are losing a quarter of their best teachers every year, it is very difficult for them to build a stable school environment, said Swain. Low-performing schools that offer retention bonuses to their best teachers tend to improve student learning by lessening reliance on replacement teachers, who are often less effective and less experienced than their peers.

While some critics argue that identifying and replacing low-performing teachers can help improve student achievement, oftentimes, at high-poverty schools, these teachers are replaced by instructors who perform well below average. According to Swain, a more promising strategy is to retain the most effective teachers to help enhance the learning environment.

"We try to figure out what are the challenges and what problem this policy highlights," said Swain. "And here, I think it highlights the fact that turnover of some of the most successful teachers is a big problem in our schools that are struggling the most. And when you address that, one tool that can be used is conditional compensation where you ask teachers to stay and be a leader. Then, you're ultimately putting the decision in the teacher's hands."