"Despite the complete lack of evidence that they work, pay-for-performance schemes seem to be as popular as ever," writes Justin Baeder in the On Performance blog at the Education Week website. "Why does anyone think such plans will improve student learning?"
One related analysis, writes Baeder, comes from the 2007 article "What to Do? The Effects of Discrepancies, Incentives, and Time on Dynamic Goal Prioritization" in the Journal of Applied Psychology. In this article, Aaron Schmidt and Richard DeShon describe how they used a computer-based experiment to explore how performance goals and incentives influence the allocation of resources.
To learn more, read Baeder's full article.