All educational institutions strive to achieve the best possible standards for their students. While the competence of the teachers and the faculty is of immense importance in achieving the high standards of learning and education, there is something more which can make an important contribution towards improving the learning standards. It is creating incentives to attract talented students and simultaneously creating incentives for the students themselves to perform better. There can be different views, however, about how these objectives can be achieved.
Rewards at Immediate Outputs for Learning Effort
Education benefits the students and provides long term returns that last a lifetime.
However, these returns, whether by way of financial returns, or by way of social returns, arise only after a very long incubation period, arising largely after the formal education has been completed. The deference of these returns along with the uncertainty associated with the quantity and quality of such returns reduce their capacity to incentivize immediate behavior.It is this limitation of deferred returns of learning that can be addressed, at least to some extent, by providing cash rewards in the short term. These cash rewards need not be commensurate with the effort quantum. Instead they can work as a signaling mechanism for recognition and talent. This means that the cash rewards scheme should be designed and presented in such a way that they represent both material and social returns.
When a child gets rewarded for her learning efforts, it acts in two manners. First it provides that child a material award that is earned by her and belongs to her. Given the diminishing returns, the first such reward can be most effective than repeated ones. Second, it signals a social return by signaling an acknowledgement from the society. Their combined impact can be significant.
Peer Wages
The whole world is gradually moving towards intensification of peer to peer interactions. However, one area where such interaction has already been the norm is the student life. It is a biological stage in the life of every growing adult, where she is less committed to her family, and thus fills up the void by having more intense interactions with peers. This is age where peer groups are most important in life. This also influences learning in a very significant way.
Education experts call it 'peer wages'. The students who are brilliant, exert an important influence on the
learning of their colleagues, and actually contribute to their learning. Apart from providing an immediate incentive to those who had the requisite potential, cash rewards for high grades and test scores, will indirectly promote excellence, and remunerate those students for such peer wages.Thus, when learning is incentivized among a few, it is likely to have a strong spill-over over the others, through peer group pressures and peer learning. One can expect better outcomes.
Difference between Scholarship and Cash Rewards
Actually, the merit scholarships awarded to such students are, in theory, somewhat similar to the cash rewards we are discussing here. But the main difference between scholarships and cash rewards is that the former is related more with need for supporting the next level of educational expenditure, whereas the rewards take away the concept of need. Because of this very difference, the 'rewards' are a much more powerful tool, when it comes to their motivational effects as an incentive.
Another reason why cash rewards may be better than merit scholarships, is because the scholarships, are much bigger in amount, and hence can be allowed to far lesser number of candidates. The cash rewards on the other hands can be smaller and thus distributed to a far bigger group, thereby allowing many more bright talented students to get motivated from them.
How will Cash Reward work ?
Money is a very important incentive and motivator. In fact, it will not be wrong to say that it is the primary tool with which the man has been converted into almost a working machine in modern times. Even for the students, it can be a great attraction and incentive to do better. It is a tool which has withstood the test of time. No reason why it should fail in case of education.
In today's world, market and management are all about creating right incentives. Proper incentives can change every person's behavior and it would be naive, if we do not make use of them in the field of education and human resource building for the next generation.
