The study released Tuesday by Vanderbilt University's National Center on Performance Incentives researchers found that students in classrooms where teachers received bonuses saw the same gains as the classes where educators got no incentive.
"I think most people agree today that the current way in which we compensate teachers is broken," said Matthew Springer, executive director of the Vanderbilt center and lead researcher on the study. "But we don't know what the better way is yet."
The study looked at fifth- through eighth-grade math teachers in Metropolitan Nashville Public Schools over three years from 2007 to 2009. Teachers could receive between $5,000 and $15,000 annually, depending on how their students performed on standardized tests.
Springer was quick to point out that his study only looked at individual bonuses and did not examine team-based bonuses or school-based merit pay programs. He also stressed that the study points to the need for more scientific research on merit pay.
Up until this point, there were only a handful of valid studies on merit pay, mostly from other countries.
"Some people were initially disappointed when they saw the results, but quickly turned around and said, 'Well, at least we finally have an answer," he said. "It means pay can't do it alone."
Just a handful of schools and districts across the country have merit pay programs, and in some states the idea is effectively illegal.
The White House hoped to woo more states into passing merit pay laws with its $4.35 million "Race to the Top" grant competition.
Some states tried to enact merit bonuses for teachers but most, like Georgia, were unable to seal the deal. Colorado passed a controversial law that ties teacher pay to student performance and allows the state to strip tenure from low-performing instructors, but the state did not win any grant money.
In Louisiana, Florida and Minnesota, where a few local districts have been offering merit pay to teachers for years, lawmakers and governors are aiming to expand those into statewide programs.
The U.S. Department of Education called Vanderbilt's study too narrowly focused.
"It only looked at the narrow question of whether more pay motivates teachers to try harder," said Sandra Abrevaya, spokeswoman for the U.S. Department of Education. "What we are trying to do is change the culture of teaching by giving all educators the feedback they need to get better while rewarding and incentivizing the best to teach in high need schools, hard to staff subjects."
But the American Federation of Teachers, a national teachers' union, praised the study and argued that teachers need other resources, including training, professional development, time with other educators and supportive administrators.
"Merit pay is not the panacea that some would like it to be. There are no quick fixes in education," said union president Randi Weingarten. "Providing individual bonuses for teachers standing alone does not work."