Teacher Incentives and Performance: An Application of Principal–Agent Theory

Abstract

The paper summarizes principal-agent (P-A) theory and applies it to the teaching profession, arguing that it provides a strong framework for analysing institutional arrangements governing the work of teachers. P-A theory proposes factors that determine whether or not paying teachers in relation to measures of performance improves teacher productivity. Teachers' work is characterized by moral hazard, risk aversion, multiple principals and multiple objectives, which make the design of an optimal performance pay system complex, especially as it needs to be context specific. A crucial factor is the extent to which teacher motivation is altruistic or opportunistic. International evidence on teacher rewards systems and their relation to teacher performance is summarized. In many developing countries, such as India, teacher contracts fail to provide sanctions for poor performance or rewards for effective teaching. In such contexts, improved incentives for teacher performance are an essential component of reforms to raise the quality of education.

Palmed Off: Incentive Problems with Joint-Venture Schemes for Oil Palm Development on Customary Land

“…The principal-agent literature is concerned with situations in which one actor (the principal, e.g., a landowner) contracts another actor (the agent, e.g., a share-cropper) to carry out work on the principal's behalf (Eisenhardt, 1989;Levacic, 2009;Stiglitz, 1988). The principal-agent problem arises where (a) the interests and objectives of the two parties conflict or at least are not completely aligned, (b) it is not technically or economically feasible for the principal to verify exactly how well the agent is carrying out the work in question (with respect to time, effort, and diligence), (c) the principal and agent have different attitudes to risk.…”

Problemas de agencia en la educación básica en México: un diagnóstico institucional

“…En esta fase persiste la asimetría de información al dificultársele al principal conocer la conducta/esfuerzo del agente -contratado por el principal para llevar a cabo una actividad que no puede realizar-. Simplemente, el agente tiene más información (Gibson et al, 2005;Levaćič, 2009;Lane, 2008;Ferris, 1992;Shapiro, 2005). A esto se le llama acción oculta.…”

“…Sin importar los motivos de la acción oculta, el agente-maestro se encuentra en situación de riesgo moral (Levaćič, 2009;Rauchhaus, 2009;Shapiro, 2005;Lane, 2008;Casson, 2007;Ferris, 1992;Arnott y Stiglitz, 1991). Es situación de riesgo moral porque lo único que regula la conducta del agente es su código moral.…”

Mekanisme Pemberian Insentif Tenaga Akademik Di Universitas Negeri Yogyakarta

“…Sebaliknya, apabila universitas mengalami devisit anggaran, maka sangat tidak menutup kemungkinan pihak pengambil kebijakan universitas akan mengurangi dan jika diperlukan menghilangkan alokasi anggaran untuk insentif dosen. Meskipun insentif itu (insentif finansial) merupakan komponen penting dalam sebuah organisasi untuk meningkatkan kinerja dan daya saing individu (tenaga akademik), dan juga lembaga (lihat Goodman & Turner, 2010;Lazear, 2003;Levacic, 2009).…”