As the usual round of NAEP score sturm and drang makes the rounds, Larry Cuban looks at our obsession with making numbers bigger.
The answer is that intense pressures upon corporate executives to satisfy investors and upon school leaders to raise test scores distorts routine practices soemtimes leading to chicanery. Over the last decade, stories have emerged from multi-billion dollar corporate offices that CEOs doctored earnings reports to keep investors happy (while protecting their stock options), and educators fiddled with standardized test scores.
Before the 2008 financial meltdown, earnings statements (and forecasts) as signs of corporate success pushed corporate officers to claim as earnings, funds that had little to do with customer transactions in a given year. For example, Computer Associates and Xerox CEOs claimed revenues in one year that their customers were actually paying them over three years. In some cases, the chicanery was so blatant that it became criminal. Bending flexible accounting rules too far sent Kenneth Kozlowski of Tyco and John Rigas of Adelphi to jail. The collapse of these corporations destroyed lives of employees and investors.
The obsession with earnings in a given year even now in the midst of slow job growth, comes from the hard-core belief that these numbers signal the quality of a firm’s performance. Yet economists and financial analysts say repeatedly that one quarter’s earnings do not predict the next quarter’s profits. Nonetheless, earnings reports have become the single marker that has convinced investors that CEOs and their chief financial officers have created value for them and shareholders.
What’s the connection between earnings reports and use of standardized test scores to judge school performance? In the past two decades, business-oriented reformers have pressed schools to set standards, be accountable for results, and use test scores as measures of performance. To prod superintendents, sometimes renamed CEOs, to produce higher scores, especially in big cities, bonuses go to school chiefs who meet and exceed their targets of improved student achievement. Scores from standardized tests have also become vital in promoting (and flunking) students and awarding (and denying) diplomas, as well as a factor in evaluating teachers and principals, and ranking schools for receiving cash awards or penalties for unsatisfactory performance.