Why Incentives Don’t Pay: Introducing Bonus Pay in the Kyrgyz Republic and the Undoing of Reforms

Abstract

In 2011, the Kyrgyz Republic implemented a teacher salary reform aimed to attract new teachers to the profession and to motivate teachers to improve the quality of their work. A key component of the reform was the introduction of the Stimulus Fund, an incentive pay structure. Although the Stimulus Fund comprised only 10 percent of the budget allocated to schools for staff compensation, this paper shows that it nevertheless played a significant role in the reform implementation process. This article examines whether the Stimulus Fund was successful in motivating teachers and the extent to which it was employed as intended to incentivize and reward high-performing teachers. The theoretical framework for this research builds on the scholarship of Larry Cuban (1998), who posits that schools and not policy makers are the key influencers of whether reforms are adopted or rejected. What this study suggests is that contrary to policy goals, the introduction of incentive pay had a deleterious impact on teacher motivation and resulted in a number of unintended consequences, including intergenerational rifts among teachers, a rejection of other components of the 2011 teacher salary reform, and a failure to make progress in overcoming the persisting challenge of attracting and retaining qualified teachers. As early as six months after the reform was announced, it began to be dismantled by schools and teachers. I argue that the Stimulus Fund was a catalyst for undermining the entire new teacher salary reform.