Nelson needs to read the research and try something radical with education

Yet it is difficult to think of another profession in Australia with less of a link between pay and performance. Australia's teachers face a flatter pay schedule than in most other developed countries, creating a perverse incentive for the best teachers to leave the profession after their first 10 years. And while principals are required to assess their teachers annually, a report by the NSW Auditor-General in May found that 99.6 per cent of teachers were given the highest possible rating.

A good performance-pay system should be based on multiple criteria. These could include the increase in students' test scores from one year to the next, an annual knowledge exam, classroom observation by an independent expert, an interview with the teacher, and separate questionnaires from parents, peers and principals. Rewards need not only be financial, they could also include higher status and responsibilities.

For all the talk of clever countries and knowledge nations, Australia has been remarkably timid on the issue of school reforms. It is time we moved on from class-size cuts to consider raising the school-leaving age, rigorously testing new policies, and implementing performance-based teacher pay.

Brendan Nelson's report card so far reads: "Promising effort. Not afraid to speak in class. More creativity required."

Research by Dee & Keys (2003): http://www.swarthmore.edu/socsci/tdee1/Research/merit0803.pdf (160Kb)
Research by Oreopoulos (2003): http://www.chass.utoronto.ca/ecipa/archive/UT-ECIPA-OREO-03-01.pdf (288Kb)
National Bureau of Economic Reserch Working Papers 6051 http://www.nber.org/papers/w6051 and 6869 http://www.nber.org/papers/w6869