Like most organizations, colleges and universities want their employees to be as high-performing as possible. The question, like in most organizations, is how do we do it? Unlike other organizations, however, is that the job of professor is one that plateaus. The lowest rank is assistant professor. Tenure and promotion are often tied together and the employee moves to the rank of associate professor. The highest rank a person in this job title can secure is professor.

With such limited mobility, administrators are challenged to motivate professors (aside from one's own intrinsic desire and pride in being a contributing member to his/her own profession) to produce unique, quality research, teach at a high level, serve and contribute on committees, and advise students on a regular basis.

At most research-based institutions, promotion is primarily tied to the quality of their scholarship, with those other factors, while important, are perceived as secondary. Beyond the promotion, however, there are relatively few incentives offered to most professors to exceed in the classroom. Further, mediocre performance is not often punished once a professor reaches tenure status.

In addition, some of the incentives that are offered are often of little value:

• Service awards - they recognize the number of years with the institution, but only recognize longevity, not quality of performance
• Year-end awards for research, teaching or service - While it is nice to be recognized by one's peers for these contributions, the monetary award is often small, and the criteria for achieving the award are often unknown to the recipients.
  

An intriguing proposal was recently made by a contributor to the Planet Money blog at NPR.org where:

What if teachers were paid based on the future income their students make. For example, student A grows up to make 100k a year. We look at the records and find the 20 teachers that taught student A and compensate them based on that. Compensation could be based on number of months spent with student.

That way the students would turn into "investments" for the teachers.

Would this create the necessary effect of improving teaching in the classroom? Would finance/accounting or science faculty have an advantage over those teaching in the humanities or fine arts?

So, compensation professionals, what incentives do you think would motivate professors to improve their quality and productivity?