The conundrum becomes, how do we ensure that teachers are doing something? Standardized testing scales well. It allows you to create quantitative measures for an enormous number of students and their teachers quickly and at relatively low cost. The time investment is reasonable. It's where the light is good*... that's why we keep looking at it.
But it's not where we're losing our keys, so we need to look there, even though it's harder. But, what do we do? Increase the administration load, when it's already crushing our schools in some cases, so that teachers can have better supervision? And then what do we do about the inherently subjective nature of such evaluations? What if the teacher and supervisor get along well, because they're the same gender and race, live in the same neighborhood, and have kids the same age? Can we trust that they will see the teacher's work objectively, without coloring it more rosily due to their affinity with that teacher?
Ultimately, I think we need to involve a LOT more voices in the process. Students and their families should be submitting teacher evaluations each semester, just as colleges collect professorial evaluations. Teachers should do peer evaluations, possibly trading with other schools. And it should be done in a cooperative, not adversarial, manner... teachers who are having problems should be offered training, support, etc. to identify the causes of those problems and address them, so that they don't have huge incentive to try to cover their tracks.
But all that is a lot of work, real work. People have to read comments, correlate information, control for various factors. We do need to look at whether a black teacher in a predominantly white district (or a white teacher in a predominantly black district, or an Asian teacher in a predominantly Latino district, or whatever) is consistently receiving lower scores, but without "backup," i.e. no one seems to be able to describe the problem... so maybe the only problem is implicit bias.
I don't think we can give up standardized testing completely. I think it's part of the equation. But people usually are teachers for long careers... and we have the technology to track outcomes for their students over a longer time horizon. If you've been a Kindergarten teacher for 12 years, and it turns out that 70% of your students are going on to college in a district where the typical rate is 40%, you can actually find out if there's a statistically significant correlation there and if maybe you're doing something right. You don't have to wait for college, though... you can look at how students are doing in terms of discipline, grade level of achievement, awards and recognition, and so on starting from the year after they leave you. I think that, with the right approach to data-mining, we could really illuminate some success stories -- and failures -- in our educational system.
Ultimately, though, when you observe that failure is more common than success across a school, you must look higher than the teachers. To have keep good employees, you need good management. Administration needs to be held accountable for their performance in a major way. Heck, if the front office staff is rude and lazy, it will impact performance negatively, because parents will feel disconnected, teachers will have trouble getting the resources they need, etc.
Every time the organization I work for submits a large grant proposal, we have to provide (several things, but among them) our 990 tax form and an evaluation plan. The 990 tells people what our overhead ratio is... how much are we spending on management and support staff like finance and human resources compared to how much we're spending providing direct services? And, how will we be able to tell if what we're doing works? Could we hold schools to that standard? What do you suppose the overhead ratio is for your school?
* For those who aren't familiar with the joke...
A police officer happens upon a drunk, searching for something on the sidewalk and in the gutter under a streetlight. He asks the guy if he needs help.
"Yeah, I lost my keys! Can't find them anywhere!"
The cop helps the guy search for a few minutes, but finds nothing. He asks, "Are you sure you dropped them here?"
"Aw, nah, I dropped them about 20 yards down that way."
"But... why are you looking here?" the cop asked.
"The light's better!"
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