The text below is a summary of the research evidence on the impact of Performance Pay on the educational attainment of school pupils in sub-Saharan Africa. It is an analysis of individual studies of performance pay in sub-Saharan Africa. The information here is valuable for African school leaders, administrators and policy makers. It is even more valuable for parents who maybe thinking of better ways to improve on the educational attainment of their children.
Effective Basic Services (eBASE) Africa developed this summary using available research evidence while also taking into consideration prominent themes arising from key informant interviews (KII) and focus group discussions (FGD), particularly FGD with teachers and students. The research evidence in this summary is acquired from a detailed and replicable search protocol used on a wide range – listed below – of research databases for related studies in low- and middle-income countries in general and sub-Saharan Africa (SSA) in particular.
Definition of the Strand
Performance pay schemes create a direct link between a teacher’s wages or bonus and the performance of their class. There is a distinction between awards, where improved performance brings about a higher permanent salary and payment by results where teachers get a bonus for higher test scores. Performance pay measurement is closely linked to learners’ outcomes. Students’ test outcomes are sometimes the sole determinant of performance pay awards. Observations or feedback from pupils may also be used to make performance pay judgements in other instances. In some other cases, judgment is left to the discretion of the head teacher (Higgins, et al., 2016).
Why the strand is important
Improving school performance among pupils is an education objective of most, if not all countries, particularly in the developing world. How to achieve this objective usually is the point of diversion for many. While some policymakers advocate for an increase in resources, others have focused on bringing down the pupil-teacher ratio. Many others argue that resources alone will have a very limited impact without systematic reforms to education governance, teacher incentives, and pedagogy. Moreover, the impact of centrally provided resources such as more teachers is limited due to misuse by local officials (Duflo, Dupas, & Kremer, 2014). Incentives used to improve the work and performance of teachers, amongst other methods are more effective (Taylor, 2013). The objective of performance pay is to improve the work of teachers. This strand investigates the impact and efficiency of one of these many performance improvement strategies advocated for by some policy makers.
Research Evidence in Sub-Saharan Africa
Education has often been viewed as an important determinant of productivity, economic well-being and growth (Hanushek & Woßmann, 2010). The extent to which it [education] influences these variables is anchored in the quality of education, determined most at times by student performance in standardized tests.
Policymakers in the developing world, particularly across SSA, host to countries with the least amount of learning per school year, have explored various ways of improving educational outcomes. One of such ways is Performance Pay.
A multi-level randomized controlled trial (RCT) in Kenya showed that locally recruiting extra teachers under an extra teacher program (ETP) with their contract renewal contingent upon performance significantly improved students’ test scores (Duflo, Dupas, & Kremer, 2014). Schools were randomly selected and funded to hire an additional teacher on an annual renewable contract, conditional on performance and outside of the normal Ministry of Education civil-service channels, at a quarter of the compensation levels. The locally hired contract teachers were ‘granted tenure conditional on performance’. Given the potential of fraud during the recruitment of the contract teachers, perpetuated by some civil service teachers, a governance program empowering parents within school committees reduced risks and significantly improved performance of both recruited teachers and their students.
In addition, in Tanzania a field experiment comparing two performance pay schemes, a Pay for Percentile (rank-order tournament), as proposed by Barlevy & Neal (2012), and a teacher rewards program based on multiple proficiency thresholds, proved both schemes to be effective in improving student test scores (Mbiti, Romero, & Schipper, 2019). The multiple-thresholds system was less costly and more effective in boosting student learning.
While the limited number of studies in Africa show positive outcomes of performance pay, the results from other low and middle-income countries (LMICs) are mixed. For example, a three-year RCT in Pakistan showed that performance pay schemes increase exam participation rates and enrollment but do not necessarily have any effects on exam scores (Barrera-Osorio & Raju, 2017). In India, RCTs have linked improved test scores to performance pay schemes or teacher incentive programs (Muralidharan & Sundararaman, 2006, 2014). However, after controlling for student ability, parental background and available resources, the evidence suggests that private schools get significantly better academic results by relating pay to achievement; government schools do not.
Overall, evidence on performance pay from low and middle-income countries is mixed. Nevertheless, findings lean towards positive pupil learning outcomes from teacher performance pay schemes. In sub-Saharan Africa, the evidence suggests significant positive outcomes from performance pay programs. Given however, that the research evidence emanates mostly from east Africa, more RCTs should be conducted to further establish the effectiveness of Performance Pay on educational outcomes, particularly in the Lake Chad basin, which for the most part is characterized by a paucity of research evidence.
Impact, Security and Cost of Local Evidence
The local evidence of performance pay within SSA emanates from East Africa. It indicates performance pay schemes actually positively affect education outcomes. While studies that are more rigorous are recommended for other parts of the continent, particularly middle Africa, a synthesis of the available evidence is of the essence. The available evidence is limited.
Generally, the costs associated with performance pay schemes with the Lake Chad Basin contexts are expected to be moderate.
Performance pay, Performance related pay, Teacher merit pay, teacher incentives, Performance pay schemes, teacher performance pay.
Barlevy, G., & Neal, D. (2012). Pay for Percentile. American Economic Review.
Barrera-Osorio, F., & Raju, D. (2017). Teacher performance pay: Experimental evidence from Pakistan. Journal of Public Economics.
Duflo, E., Dupas, P., & Kremer, M. (2014). School governance, teacher incentives, and pupil – teacher ratios: Eperimental evidence from Kenyan primary schools.
Hanushek, E. A., & Woßmann, L. (2010). Education and Economic Growth. International Encyclopedia of Education, 2.
Higgins, S., Katsipataki, M., Villanueva-Aguilera, A., Coleman, R., Henderson, P., Major, L., … Mason, D. (2016). The Sutton Trust-Education Endowment Foundation Teaching & Learning Toolkit. London: Education Endowment Foundation.
Muralidharan, K., & Sundararaman, V. (2006). Teacher Incentives in Developing Countries: Experimental Evidence from India. Department of School Education in Andhra Pradesh.
Muralidharan, K., & Sundararaman, V. (2014). Teacher Performance Pay: Experimental Evidence from India. Journal of Political Economy.
Taylor, S. (2013). The impact of study guides on matric performance: Evidence from a randomized experiment. Bloemfontein: Economic Society for South Africa conference.