Teachers are not all built out of ticky-tacky and they don’t look just the same

Following on from yesterday's posting, the newfound ability to conduct value-added evaluations of teachers begs the question of what should be done with this knowledge. At present, perhaps partly due to ignorance of these new statistical capabilities and perhaps partly due to system constraints on firing poor performers, virtually all teachers receive the same "satisfactory" ratings. Here is a relevant excerpt from Teachers Matter (p. 46).

• We must keep in mind that public schools do not operate in a market environment. An employer in the private sector pays a price for getting rid of effective workers: he earns smaller profits. Public schools, however, don't face the market's wrath. On the contrary, since students are assigned to public schools based on their residential address, the enrollment that drives public school revenues is not altered substantially if the school's performance declines. A principal who wants to get rid of a teacher despite his effectiveness in the classroom need have little concern about the effect her decision will have on the school's bottom line or her own job.
• Many education reformers envision a day when school choice forces public schools to confront robust market forces just as a private company does. Even with the recent dramatic expansion of charter schools across the nation, market incentives will not be strong enough to hold subjective evaluations in check. Nor are they likely to be so powerful anytime in the near future.
• Subjective evaluations work well in the private sector because they hold stakes for both the observer and the observed. Likewise, an effective evaluation system for public school teachers that hinges on principal discretion must hold stakes for both parties. Absent market forces, the best way that public school have found to mimic the market's discipline is policies of accountability. A wide body of research shows that public schools respond to the incentives imposed by accountability policies focused on evaluating overall school performance.

As usual, the absence of market forces leads to distorted incentives and systemic problems. Tomorrow, I'll look at the effect of the absence of market forces on teacher compensation and the anti-excellence pressures that result.