An educational performance contract is an agreement between a local educational agency and a learning systems contractor for the education of a selected group of students, with the contract payment determined by the measured achievement of the students. This contracting technique has been applied to reading and mathematics classes in nearly 100 school districts. The future of performance contracting hinges on three major issues: (1) the ability of the contractors to produce academic achievement; (2) judgments about the appropriateness of defining educational objectives in terms of cognitive gains in general and test-scores in particular; and (3) community opinion and legal challenges to performance contracting and performance contractors. Performance contracting achieved overnight publicity because it addresses several deeply felt and widespread dissatisfactions with the current state of education. It is not a single structured program but a contracting technique that can be, and has been, applied in a number of different fashions. (Prepared for Rand educational symposia; condensed from R-699 and P-4558.)
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