•Roger Partridge is chairman of the New Zealand Initiative, a research institute supported by a membership organisation that includes business leaders and
political thinkers.

It is easy to understand the teachers' unions' objections to performance-based pay. At least if this means basing teachers' salaries solely on the performance of their students in end-of-year tests. As ACG Sunderland principal Nathan Villars pointed out in this newspaper, that would hardly be fair on the teachers with the less able students. Nor would it incentivise the best teachers to teach in the schools where they might be needed the most.

As the Post Primary Teachers' Association argued last month, it would be like basing doctors' pay solely on their surgical success rates. This, the PPTA observed, might discourage the best surgeons from taking on patients with poor prospects.

Equally, though, we would hardly want the corollary: to pay our teachers (or doctors) regardless of their performance. A system that did not reward excellence, or respond to under-performance, would have its own perverse consequences. It would risk the best teachers feeling undervalued and liable to seek alternative careers. And it would risk schools being staffed with the less qualified teachers without other career options.


Unfortunately, we have just this type of pay structure for teachers in our state sector in New Zealand. So it should be no surprise that the teaching profession in the state schools' system has notoriously high turnover. Nor should we be surprised that the state sector suffers acute teacher shortages in specialty areas like maths, science and IT, precisely the areas where teachers have readily available alternative career opportunities.

Fortunately for both teachers and students alike there is another way.

Modern performance-based pay systems like the Impact system, adopted in 2009 in Washington, DC, recognised that students' abilities and starting points differ, both across classrooms and across schools.

To address this, they take into account the level of attainment, specific learning needs and the family circumstances of the students entering a teacher's classroom. They also take into account differences between classrooms such as the number of students a teacher has. A teacher's performance is then assessed based on their students' progress throughout the year. It is not just a matter of year-end attainment. It is the "value add" that matters. In the Impact appraisal process, other qualitative measures like classroom practice, and core professionalism round out an overall assessment of a teacher's performance. And because collaboration is a key component of the system, teachers remain highly incentivised to work with their peers and as a team, despite their remuneration also reflecting their own individual performance.

This might all seem alien to teachers used to a one-size-fits-all approach to remuneration that rewards time in the job, rather than success in the classroom. But it will not seem strange to anyone else. After all, aren't most of us rewarded for how well we do our jobs, and not simply for how long we have occupied them?

It is no surprise, then, that Washington, DC's merit-based system has been a standout success. It has helped transform one of the United States' most crippled state education systems. It has permitted substantial increases in teacher pay. It has led to dramatic increases in teacher quality and in respect for the teaching profession. And, most importantly, it has resulted in DC students having one of the fastest academic growth rates in America.

In the face of such success, thinking about what we might gain from Washington, DC's merit-based model has more than a little ... well ... merit. We need to move on from old-fashioned thinking that "performance" or "merit" pay means crudely paying teachers based on the raw level of attainment of their students.

We also need to look past the comparatively poorer performance of Washington, DC's schools than our own. While DC's schools may have had lower average scores in the international education league tables than New Zealand's, many of our schools also perform very poorly. Consequently, the lessons from DC are as relevant to us as they are to improving school performance elsewhere in the United States.

More broadly, we need to be open to new ideas. The old ways may have served us well in the past. But the world is changing and our education system must change with it. The futures of our children depend on it.