Last Friday I heard this story on WUNC about the state of North Carolina vying for gobs of federal dollars for the state's education budget:

http://wunc.org/programs/news/archive/SLL0904.mp3/view

One tactic the state is taking to improve its chances is to tie teacher compensation to student performance, and it appears the state's definition of "performance" is "achievement," or in other words, having a certain percentage of students achieve a specified score on a test or tests. This presumes that teaching works in isolation, in a linear process: if a student doesn't meet a universal standard at the end of a set period of time, the teacher did not do his or her job and therefore should not be rewarded.

In their wildly popular book Freakonomics, economists Levitt and Dubner made a pretty compelling case that this system is actually counter-productive.  Instead of helping all students learn, it actually encourages teachers to either focus on those students they can "push" across the line (therefore showing the greatest "gain"), or help those students cheat (instead of learn), or both.  Students with the lowest and highest grades get the shaft.

This is not unlike what we face when determining how to measure the success of "advertising."  The key question, understandably, is, "Did this investment make us hit our sales goals?" But this also presumes that "advertising" works in isolation, in a linear fashion.  If sales don't go up after a certain amount of time, the "advertising" didn't do its job, and those responsible for it shouldn't be rewarded.

Like those students with grades teetering on the standard score, this system of compensation encourages marketers to simply focus on convincing "fence sitters" to purchase right away.  Loyal customers and those prospects who aren't in the market to purchase essentially get ignored.

In both cases, long-term, comprehensive performance takes a backseat to short-term gain.  The goal becomes “hitting our numbers” instead of “learning” or “setting the brand up to succeed.” And as soon as one effort is done, a new short-term cycle starts.

Another way to measure "performance" is "progress.”  This requires some patience and faith in the long-term impact of one's efforts and a willingness to view all factors that contribute to performance.  What if teachers were rewarded for signs that students were actually improving (i.e. learning), regardless of whether they hit the universal standard score?  And what if all teachers in a given grade level (or school) were viewed as a team, where individual compensation depended on each others’ success?  That's one new proposal in the upcoming sequel, SuperFreakonomics. 

And what happens when everyone involved with a "brand" - product development, sales, advertising/marketing, finance, operations, etc. - is equally compensated for signs that the "brand" is improving? Perhaps we’re forced to view what we do as connected pieces of a larger goal.  Failures aren’t one department’s fault, and successes aren’t one department’s credit.  And perhaps the net result is a constantly improving experience for everyone – company, client, customer and prospect.