I don't think it's necessarily true that "Merit pay invites rivalries among teachers, when what’s needed is collaboration."
If my pay is only affected by my performance then I'm quite happy to collaborate with other staff members to help them improve.
Personally I like Warren Buffett's approach to merit pay: 80% of your salary is due to your performance, while 20% is due to the performance of your other team members [1]. This gives an incentive improve your performance and to be a team player.
Well, there's the theory of merit pay, and then there's the practice. I have no idea how merit pay works in the schools trying it out, but my hypothesis is that the overall bonus pool is finite and small. After a few cycles of the game, so to speak, teachers realize that only N merit bonuses can ever be given out in any year. Under such conditions, striving for a merit bonus is directly competitive with your peers, and the pursuit (and awarding) of that bonus can get very political very quickly. Anyone who's ever worked at a large company with stack ranking, department-wide quotas on performance tiers, etc., will know all too well how this sort of system can produce adverse outcomes if not implemented very carefully.
Buffet's system seems like an improvement on that scheme, but it, too, can be perverted under the wrong evaluation and management systems. If the group bonuses are team or unit-based (which seems likely, given the way such systems are usually implemented in order to manage at the local/proximate level), then team leaders compete for political favor. What results is that the savviest team leaders secure the rewards for their teams, whether by currying favor with the higher-ups, or by inflating their performance evaluations. (There are ways around this, however, and they rely on the artful management of access and information symmetry.)
I'm not opposed whatsoever to the idea of giving teachers bonus pay, or hell, higher pay in general. We should be trying to make the profession more prestigious and attractive, and accordingly, raising the bar on whom we accept into the field. There seems to be something working in the Scandinavian model, which regards (and rewards) teachers sort of like how the US regards and rewards lawyers, consultants, and other professionals. Perhaps the US is just too big and too heterogeneous to make something like that work. And there is something to be said about being unable to fire underperformers (though I do think that's putting the cart before the horse). Today's reformers are focusing on culling the dead weight, or on opening up more charter schools. The problem is that most of the weight is dead weight right now. We've had decades of adverse selection into public school teaching, which has become a profession of last resort. Culling dead weight is fine, but we need to rethink the way we treat and compensate the profession if we want to attract professionals to the field.
You just need to have a much wider pool than just one school. If the state has 100 high schools then you helping out at your local school has a net positive effect.
Possible downside is losing schools will have an even harder time competing. As a counter for that you might want some sort of built in correction factor based on the schools population.
> If my pay is only affected by my performance then I'm quite happy to collaborate with other staff members to help them improve.
It works that way if the bonus pool is not finite, i.e. everyone gets more when they perform better. The moment they limit the pool to top N performers, incentives flip from promoting strong collaboration and helping each other to strong competition and sabotage.
If my pay is only affected by my performance then I'm quite happy to collaborate with other staff members to help them improve.
Personally I like Warren Buffett's approach to merit pay: 80% of your salary is due to your performance, while 20% is due to the performance of your other team members [1]. This gives an incentive improve your performance and to be a team player.
[1] Page 19 of Buffett's 2010 letter to shareholders: http://www.berkshirehathaway.com/letters/2010ltr.pdf