The Effect of Evaluation on Performance: Evidence from Longitudinal Student Achievement Data of Mid-career Teachers

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Eric S. Taylor, John H. Tyler NBER Working Paper No. 16877 Issued in March 2011 NBER Program(s):   ED The effect of evaluation on employee performance is traditionally studied in the context of the principal-agent problem. Evaluation can, however, also be characterized as an investment in the evaluated employee’s human capital. We study a sample of mid-career public school teachers where we can consider these two types of evaluation effect separately. Employee evaluation is a particularly salient topic in public schools where teacher effectiveness varies substantially and where teacher evaluation itself is increasingly a focus of public policy proposals. We find evidence that a quality classroom-observation-based evaluation and performance measures can improve mid-career teacher performance both during the period of evaluation, consistent with the traditional predictions; and in subsequent years, consistent with human capital investment. However the estimated improvements during evaluation are less precise. Additionally, the effects sizes represent a substantial gain in welfare given the program’s costs. This paper is available as PDF (219 K) or via email.