After years of being a third rail, teacher merit pay is slowly making its way back to the forefront of education policy debates. At first glance, it seems like a pretty simple idea. Studies show that, when it comes to improving student achievement, teachers matter more than any other element of schooling. Moreover, teaching can be a difficult and stressful job. If effective teaching is incredibly important and incredibly difficult, those who are highly-effective should be rewarded for their efforts and skill—especially when they work in high-need schools. There’s also research demonstrating that merit pay programs are associated with a statistically significant increase in student test scores and that they have the potential to decrease teacher turnover and increase recruitment.
It’s no wonder, then, that advocates and political leaders are showing interest. But implementing merit pay in schools is tricky business. The same research that points to the benefits of merit pay programs also finds that their success largely depends on design and context. If policymakers don’t get the details right, they could be plowing full steam ahead toward a policy shipwreck.
One way Ohio could navigate these tricky waters is to emulate states that have already successfully done so. Texas is a prime example. The Lone Star State began implementing a statewide teacher performance pay program known as the Teacher Incentive Allotment (TIA) in 2019. The initiative is designed to offer top teachers “an accessible pathway to a six-figure salary” and help districts attract and retain high-performers. TIA gives districts and open-enrollment charter schools the option to create and use a local designation system to identify top educators and label them as “Recognized,” “Exemplary,” or “Master” teachers for a five-year period. Employing designated teachers generates additional state funding for participating districts, as they receive an annual allotment based on a teacher’s designation level. Greater funding is available for those who work at high-needs or rural campuses.
Since its inception, participation in TIA has grown exponentially. According to the 2023–24 TIA annual report, there were only thirty-three participating systems during the 2018–19 school year. By 2024–25, participation had shot up to a whopping 597—nearly half of the districts in Texas. Teachers’ views on tying pay to classroom effectiveness also improved over time, moving from 56 percent being supportive in 2022 to 62 percent in 2024. Moreover, TIA appears to be having a positive impact on teacher retention efforts. Retention rates for TIA identified teachers remaining in the same district in a teaching role from the 2022–23 to the 2023–24 school year was 88.5 percent, compared to 80.4 percent for non-identified teachers.
The annual report doesn’t offer in-depth data on student outcomes. But TIA designations are directly tied to individual student growth data (more on this later). This means the teachers who are being rewarded with higher pay—and are more likely to be retained by their districts in teaching roles as a result—are those who have demonstrated their effectiveness according to a student growth measure. (Roughly 10 percent of teachers in participating districts have been identified.)
But how, exactly, does TIA work? Let’s take a closer look at three key aspects of the program: local designation systems, the application process, and funding.
Local designation systems
The cornerstone of TIA is local designation systems. Districts have the flexibility to design their own unique systems to align with local goals for retention, recruitment, and staffing. But every system is required to include or address three main components.
1. Eligibility
Districts can make all teachers eligible or choose which teaching assignments and campuses qualify. They can also establish local eligibility prerequisites, such as mentoring, years of experience, attendance, or campus leadership roles.[1]
2. Teacher performance data and designation criteria
Teacher performance data consist of classroom observations, student growth, and any additional components a district may choose to include (like results from student and parent surveys or teacher attendance). TIA requires the observation component to amount to at least 45 minutes of instructional time, and all teachers must be evaluated using an approved rubric. Meanwhile, to meet the requirement for a valid and reliable student growth measure, districts can choose from four options: student learning objectives, pre- and post-tests that include expected growth targets (like nationally norm-referenced exams), portfolios, or value-added models. It’s important to note that districts must establish growth targets at the individual student level. The state requires this for two reasons: One, it ensures districts measure a teacher’s impact on all students; and two, it makes designation accessible to all effective teachers, regardless of student demographics.
Designation criteria refers to the process a district uses to determine which teachers[2] are assigned to the three performance levels of Recognized, Exemplary, and Master. Teachers with National Board Certification can be identified as Recognized, and districts that employ them can receive TIA funds, even without a local system in place. The Texas Education Agency (TEA) does not choose which teachers qualify, nor does it reject individual teacher designations. But TIA does have performance standards for teacher observation and student growth ratings at each designation level that were established using statewide teacher performance data. Each level represents teacher performance relative to all Texas teachers: Recognized designations represent the top 33 percent, Exemplary the top 20 percent, and Master the top 5 percent. Prior to approving local systems, the department closely examines districts’ overall alignment to those standards, but exact alignment is not required. The TIA Guidebook provides a more detailed look at the statewide performance standards for both teacher observation and student growth.
3. TIA spending plan
Districts are required to develop a local spending plan, and state law details how they can spend their allotted funds. At least 90 percent of the allotment must be spent on teacher compensation at the campus where the identified teacher works. Allowable uses include stipends or salary increases for designated teachers, stipends or salary increases for other teachers at the same campus (like classroom inclusion teachers), and benefits and retirement contributions. These funds cannot be used to compensate school leaders, non-instructional staff, central office staff, or staff who work at a different campus. Up to 10 percent may be used to support the local system or to assist teachers in earning designations. Allowable spending includes professional development for teachers, TIA assessment costs, and recruitment efforts like job fairs. These funds cannot be spent on general administrative expenses.
Application process
The TIA Guidebook offers an in-depth look at all the various steps a district must take to participate in TIA. Before the application process officially begins, districts design their local system. They do so by selecting one or more “TIA Leads” to drive the system design process, coordinate with staff and stakeholders, complete the application, and oversee implementation. Support is available through regional education service centers, technical assistance providers, and TEA.
Once a district has designed its system, it goes through a three-year application and approval process. During year one—the application year—district officials attend technical assistance sessions and submit their formal application. Year two, the “data capture” year, is when districts implement their systems and collect teacher performance data. Districts are also required to administer the TIA Teacher Buy-In Survey, developed by Texas Tech University, at the beginning of year two to gauge teachers’ understanding and degree of support for their district’s system. Then, in the fall and winter of year three, districts submit teacher designations and performance data to Texas Tech for validation. TEA conducts a final holistic review of the system, and allotments are awarded once a district receives state approval.
Funding
TIA is an allotment—not a grant program—included within the state’s school funding system, making it a steady and sustainable funding source for schools. The allotment formula is complex, comprising a base allotment (the minimum amount that a designated teacher generates), a multiplier rate (additional funding allocated to teachers who work at high-needs or rural campuses), and an average campus student point value (calculated from a campus’ socioeconomic and rural status). Funding levels range from $3,000–9,000 for Recognized teachers, $6,000–18,000 for Exemplary teachers, and $12,000–32,000 for Master teachers. There is no cap on TIA allotment funds or the number of teachers who can earn a designation. And because districts receive larger funding amounts when identified teachers work in high-need schools, TIA incentivizes the state’s best teachers to work in the schools that need them most. According to the most recent TIA annual report, the total allotment payout for the 597 districts participating during the 2024–25 school year was $292 million.
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Teacher merit and incentive pay has a long history of controversy and pushback, including in Ohio. Much of this pushback can be attributed to valid questions about how to design programs to ensure they’re fair and effective. Texas offers Ohio an intriguing example of what’s possible, as TIA has proven to be popular with both districts and teachers while successfully boosting retention. But if Ohio leaders want to implement a similar program here, there are some big questions they’ll have to answer. Stay tuned for a closer look at some lessons that Ohio can learn from Texas.
[1] These prerequisites may exclude teachers from designation consideration even if their performance otherwise qualifies them.
[2] “Teachers” is defined as student-facing instructional staff. This can include instructional aides and paraprofessionals, classroom inclusion support teachers, and other staff who primarily work directly with students in an instructional setting.
