The idea of judging the effectiveness of teachers based on the learning gains of students was first introduced into the research literature in 1971 by Eric Hanushek, an economist currently at Stanford University. It was subsequently analyzed by Richard Murnane of Harvard University among others. The approach has been used in a variety of different analyses to assess the variation in teacher effectiveness within schools, and the estimation has shown large and consistent differences among teachers in the learning pace of their students.
Statistician William Sanders, a senior research manager at SAS introduced the concept to school operations when he developed value-added models for school districts in North Carolina and Tennessee. First created as a teacher evaluation tool for school programs in Tennessee in the 1990s, the use of the technique expanded with the passage of the No Child Left Behind legislation in 2002. Based on his experience and research, Sanders argued that "if you use rigorous, robust methods and surround them with safeguards, you can reliably distinguish highly effective teachers from average teachers and from ineffective teachers."
A 2003 study by the RAND Corporation prepared for the Carnegie Corporation of New York, said that value-added modeling "holds out the promise of separating the effects of teachers and schools from the powerful effects of such noneducational factors as family background" and that studies had shown that there was a wide variance in teacher scores when using such models, which could make value-added modeling an effective tool for evaluating and rewarding teacher performance if the variability could be substantiated as linked to the performance of individual teachers.
The Los Angeles Times reported on the use of the program in that city's schools, creating a searchable web site that provided the score calculated by the value-added modeling system for 6,000 elementary school teachers in the district. United States Secretary of Education Arne Duncan praised the newspaper's reporting on the teacher scores citing it as a model of increased transparency, though he noted that greater openness must be balanced against concerns regarding "privacy, fairness and respect for teachers". In February, 2011, Derek Briggs and Ben Domingue of the National Education Policy Center (NEPC) released a report reanalyzing the same dataset from the L.A. Unified School District, attempting to replicate the results published in the Times, and they found serious limitations of the previous research, concluding that the "research on which the Los Angeles Times relied for its August 2010 teacher effectiveness reporting was demonstrably inadequate to support the published rankings."
The Bill and Melinda Gates Foundation is sponsoring a multi-year study of value-added modeling with their Measures of Effective Teaching program. Initial results, released in December 2010, indicate that both value-added modeling and student perception of several key teacher traits, such as control of the classroom and challenging students with rigorous work, correctly identify effective teachers. The study about student evaluations was done by Ronald Ferguson. The study also discovered that teachers who teach to the test are much less effective, and have significantly lower value-added modeling scores, than teachers who promote a deep conceptual understanding of the full curriculum. Reanalysis of the MET report’s results conducted by Jesse Rothstein, an economist and professor at University of California, Berkeley, dispute some of these interpretations, however. Rothstein argues that the analyses in the report do not support the conclusions, and that "interpreted correctly... they undermine rather than validate value-added-based approaches to teacher evaluation.”