Association for Public Policy Analysis & Management

While the literature has demonstrated that pay-for-performance policies for teachers can yield mixed results in increasing test scores, the actual responses of teachers and principals that lead to success or failure are poorly understood. Taking advantage of a merit-pay program in North Carolina, and using the NC administrative data, a novel survey data set that elicits faculty 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. Preliminary results show that a principal with experience may be able to change the relationship between administration and faculty into a more collaborative one, which then can lead to improvement in test scores.