Would you have done better at school if your parents had given you cash for top grades? Do you have a different relationship with money and work, thanks to the incentives your parents offered around results day? Deciding to pay for results can be tricky. At NatWest Rooster Money we’ve taken a look at both sides of the argument, to help parents make a decision based on what fits their family. In this post we analyse the pros and cons of paying for grades, as well as give you some tips on how to pay your children if you choose to do so.   

1. Should you pay for grades?

Before you decide to pay your children for achieving good school grades, you might want to ask yourself a few questions about education, money and how you want to bring your kids up. 

First of all, should you pay your child for good grades at all? The truth is, it really depends on what you value. Are good grades from your children important to you? Or is it more about the learning process itself? And what’s a good grade for your son or daughter? A solid B or C in a difficult subject is a real win for some kids; don’t just aim for the A stars!

Additionally, what do you see as your ultimate goal? Why do you want your kids to earn good grades? Do you hope they will achieve high exam scores, get into a good university and then a good job? Perhaps you think that by aiming high you’re pushing them at the right level. And of course, it depends on your child’s goals – do they already have an ambition? A vision of what they would like to do in the future? Do they see good grades as a route towards this goal? We don’t believe that one size fits all, but it’s helpful to weigh up both sides.

Finally, ask yourself whether you’re interested in scientific research that has been undertaken to discover whether paying children for high grades actually works? This might sound odd, but there’s quite a bit of evidence to indicate that offering kids money  for grades doesn’t actually improve academic performance (more on this, below).

2. Arguments for paying for grades

The main argument for paying for grades is that it incentivises kids to maintain high grades. Just like a real job, you are paid for high performing work, so why not start sooner?

There isn’t really enough evidence to show that this works. Studies dating back to the 1970s have indicated that, while paying for grades can work in some cases, cash rewards can also actually lessen a child’s love of learning, and lead to kids disengaging.

You see, scientists have looked hard at children’s natural curiosity for a subject. If a kid really likes maths, history or music, and works hard already, studies have shown that giving money for good work actually damages that kid’s natural curiosity.

However, if that natural curiosity isn’t there – or if the task is just hard work, plain and simple (think of memorising French verbs or practising handwriting)–then a little bit of monetary motivation can provide the boost needed.

Regardless of whether paying actually leads to good grades, you may want to offer your children a monetary reward for high academic achievement, simply to show that you value school, and express value with money. Plenty of parents set chores for their children to complete in return for pocket money, such as mowing the lawn or setting the dinner table. There’s no reason not to add a good, or achievable exam result to this list, even if the relationship between that score and that money aren’t as straightforward as we might suppose. Remember, a good result for your child isn’t necessarily top of the class; what you really want for them is to fulfil their potential. 

3. Arguments against paying for grades

Again, if you’re approaching cash and grades in a purely logical way, you might want to question whether a cash incentive leads to high achievement. It might, but it might not.

As outlined earlier, research shows that external rewards reduce childrens’ internal interest in learning.

Also, kids will have to learn at some point that doing well at school is a reward in itself. It leads to better chances in life and a better understanding of the world. If they’re only thinking about that extra £5 they can get for a test, they may not make this connection..

Finally, in paying for grades, a parent effectively assumes that a child’s failure to achieve a high exam score lies in their lack of motivation, rather than other factors, such as their own innate ability, exam pressures or the effectiveness of their school. Before you set that cash goal, maybe consider whether the money might be better spent on something else to help build their confidence, such as a tutor, or some training in exam technique?

4. How much and when should I pay for grades?

Grades start mattering in secondary school, around the time of GCSEs, so if you are to pay for grades we recommend getting them started one year earlier. This would mean around Year 9. However, if you want to get them started earlier then it’s totally up to you.

Incentivising in itself can be hard. If you sit down and agree with your child what they want to achieve (e.g. a specific grade, university place or class next year) you can work with them and then reward them when they hit their objective grade. And if they don’t, acknowledging the effort put in is important to let them know you appreciate what they’re doing. 

Make sure you understand how exams and end of year reports are graded. The meaning of different numbers and letters used to express a grade will vary from year to year; ensure you both know what, say, a 7, 8, or 9 grade means, and can agree on the right reward for the right score.

We also recommend challenging your child with specific short-term goals first. This means not saying: ‘Here’s £10 if you get over 100 in your SATs’ – your child probably won’t know where to start. The key is to take baby steps and then a bonus if they get the required grade at the end. You can pay them £0.50 for every homework assignment completed, or £2 for a good essay. You can also replace the end bonus with a fun experience such as going to your favourite restaurant or taking a day trip – this shows them how experiences are sometimes more rewarding than just money. 

At Rooster we’ve done an analysis of what Rooster families pay their children for academic work. The results show that on average, families paid £14.94 for a good school report, and that the most rewarded subject was maths. This is a good starting point if you’re not sure what to pay your child.

5. How do I pay for grades?

Part of setting up these milestones is to put together a homework routine. On certain days your child does the homework, and you can then decide to pay them by hour or by task completed. Both work well, although it really depends what kind of homework they’re working on. After the hour or the task is up, you can sit down with them and chat through the work completed – was there enough effort? What is missing? How can I improve on the next task? Encourage them to pay attention to the final result. 

Creating a schedule with milestones teaches your kid how hard work pays off as well as the importance of baby steps. It also allows them to feel like they’re working alongside you, and not for you. Paying for small milestones helps your child understand the system and instils good study habits. You can easily do this with our Rooster app by ‘Boosting’ money. You can also set longer term Goals to work towards, or regular Chores to tick off.

We hope the advice on paying your kids has been useful – remember, the most important is to simply do what you are comfortable with.