What if banks paid higher interest on checking accounts than savings accounts? Would the savings rate decline? You bet. Incentives alter outcomes, sometimes in unintended ways.

This is what happens today when we evaluate high schools, basing everything on test scores. Test scores become the incentive, but perversely they also become a disincentive.

How do we select “principals of the year” across the country? Nowhere do the criteria consider high school graduation rates. Test scores literally mean everything. Kids who drop out don’t count.

Here’s how it works: If high school principals accept that half of ninth-graders won’t graduate from 12th grade, the schools’ average test scores will rise.

Kids who drop out aren’t doing well. By staying in school, they are a drag on test scores, pulling school averages down and making everyone, from school boards to district superintendents to principals on down, look bad.

This system’s perverse impact punishes principals trying to prevent dropouts. The more dropouts principals save, the worse school test scores can be, creating an incentive not to help the very kids who most need help.

The current metric accepts the average current high school graduation rate of 73.4 percent – 50 percent among many minority or disadvantaged kids. America’s high schools lose 7,000 students a day or 292 an hour – 75 while you read this.

I began as a social worker in Tennessee’s juvenile justice system – a system made up mostly of dropouts. Most graduated to state prison.

I decided to try something different. Today, our organization runs alternative dropout prevention and recovery programs in 130 school districts with a total of 13,000 challenged kids. Eighty-one percent of them now graduate.

Our biggest challenge isn’t the kids. It’s convincing school administrators that trying to save these kids is worth the downside of hurting their schools’ test scores because our nation rigs the scoring system by punishing, instead of rewarding, educators who keep troubled kids in school.

Here’s how the current “don’t-count-every-kid” metric works in this country.

California scores schools on a 200-point to 1,000-point scale. If 250 students, many minorities, are in ninth-grade classes and only 50 percent graduate from 12th grade, 125 kids went missing along the way. But if those dropouts result in a school’s test scores rising to a decent 700, the news headline would read, “Test scores rise at local high school.”

Misleading, isn’t it? Not counting the kids who go missing makes the school look better than it is.

What if we changed the formula to hold the system accountable for losing kids and reward principals who save them?

California applies a mathematical curve to test scores. You get a bigger, faster reward by improving performance at the lower end. The incentive is moving kids from below basic up to basic performance, a good approach.

I propose bending that curve the same way so principals get a faster reward if they graduate 50 more kids a year. That’s achievable.

California has moved in the right direction. Test scores will now count for only 60 percent of schools’ overall performance grade. It’s uncertain what will comprise the other 40 percent. But this isn’t good enough.

Test scores should only count for 50 percent of a high school’s overall score. Graduation rates should count for the rest.

So rating high schools on a 200-point to 1,000-point system, those with a test score of 700 today would start out with 50 percent of that 700, or 350 points.

The only way for schools to reach their previous score of 700 would be by improving graduation rates. Then the kids who are so easy to ignore become an essential ingredient in how well schools are graded.

A principal who works hard to save just 50 of those kids would raise the graduation rate from 50 to 75 percent. Using the “count-every-kid” metric I propose, the overall school score would rise back to 700 – an honest 700; a 700 that saved 50 kids from lives of failure and misery. We would redefine scoring to include kids who need help the most.

Flaws exist in any equation. Experts and statisticians can poke holes in my math. They can’t poke holes in my thesis. Measures of success and failure must change. We must reward, not punish, schools that save kids’ lives. We can’t reward one another based on the premise that kids who don’t graduate somehow don’t count.
Mark Claypool is the CEO of Educational Services of America.

This article originally appeared in the Sacramento Bee