Association for Public Policy Analysis & Management

Educator incentive programs offer the promise of better aligning teacher compensation with effort, but potentially at the cost of introducing conflict or stress into the workplace.  These potentially offsetting mechanisms could explain disparate impact estimates in the existing literature.  Using North Carolina administrative data, a novel survey data set that elicits teachers’ opinions about the school environment, and a regression discontinuity framework, we examine how teachers’ perceptions of the efficacy of school leadership, work environment, and allocation of scarce resources are impacted by negative and positive bonus outcomes. Surprisingly, preliminary results show higher morale and perceived workplace quality among teachers who did not qualify for an incentive payment, suggesting that the failure to earn such a premium prompts positive change in the organization.