February 2008 | National Center on Performance Incentives Working Paper 2008-04

Holding Accountability to Account: How Scholarship and Experience in Other Fields Inform Exploration of Performance Incentives in Education

by Richard Rothstein

Accountability and performance incentive plans in education are compromised by goal distortion, gaming, and corruption. Education policy makers who design such plans have paid insufficient attention to similar experiences in other fields. This paper by Richard Rothstein describes institutions in health care, job training and welfare administration, and in the private sector, that employ performance incentive systems, and the perverse consequences that follow. Because of such consequences, private sector performance incentives rely primarily on subjective evaluations, not easily corrupted quantitative measurements. In the public sector and service professions like teaching, performance incentives run the risk of subverting the intrinsic motivation of agents. The paper notes, however, that despite goal distortion, gaming, and corruption, performance incentive plans may nonetheless improve average performance on measured dimensions.

This publication is available from the National Center on Performance Incentives web site [PDF]