Grade 9-12

Classroom Cash Incentive Plan

Updated: July 1 2015,
Author: Susan McLaughlin

Students will be rewarded for positive behavior and performance in class through a monetary incentive program. Classroom cash will be earned on a daily basis for such things as attendance, punctuality, and assignment completion. Conversely, students will be charged for such things as absences, tardies, hallway passes, behavior, and missing assignments. Classroom cash can be redeemed for specific priviledges. For example, such things as where they sit, hallway passes, and credit toward assignments. In the end, student behavior and performance improve as they strive to take advantage of this incentive program.


cash in hand How would you like to be able to buy the right to sit wherever you want to sit in economics class? Have you ever wondered what it would be like to earn the money to pay a teacher for an assignment instead of having to do the work yourself? If you play your cards right you may be able to do just that. You will participate in a classroom incentive program that will pay you for doing what is asked of you in class on a daily basis. Attendance, good behavior, and work completion will allow you to spend the classroom cash you will earn on luxuries that you want. Make good choices every day and you will be compensated. In this lesson you will learn how the incentive program affects the personal choices students make in class. You will also analyze how economic incentives can affect behavior.

Learning Objectives

  • Explain how positive and negative incentives affect behavior.
  • Recognize the economic and personal benefits of making good choices on a daily basis.

Resource List

  • You will need some sort of spreadsheet or chart to track student account balances. If you choose to, all classroom cash transactions can be done from this source.
  • Create your own classroom cash. This can be fun and creative but it will require extra time and resources. You can hold a contest among the students to design the cash and offer a classroom cash reward to the winner. Using actual classroom cash can also allow for a 'payday'– a time when you distribute their cash. This also adds an element of responsibility for the students as they are in charge of keeping track of their 'money.' This program could be incorporated into your daily classroom procedures and discipline plan.

[Note: This lesson is a template for a token economy which provides a simulated economic incentive for appropriate conduct. Economic concepts should be taught by the instructor using this plan in a manner which kids can see tangible results from their actions. It is up to the teacher to adapt specific concepts into a lesson. For example, concepts such as inflation, recession, etc can be simulated with this plan. This plan can be used as a supplement to the normal economics curriculum. Therefore, additional web related resources are not necessary.]


booksEconomic incentives are the additional rewards or penalties people receive from engaging in more or less of a particular activity. At the start of the program, students will answer the survey below; their responses will give the teacher a good idea of what classroom privileges are important to them, thus helping the teacher to gauge the level of demand for privileges and set prices based on demand. Every class is unique in its makeup, so results may differ from class to class. Obviously, the higher the demand, the more value that should be placed on the specific privilege. These are sample questions; the list may be different based on what you allow in your classroom.

Please rank the following classroom privileges. in order of importance to you.

  • Restroom Pass
  • Free Homework Assignment Coupon
  • Locker Pass
  • Choosing your seat
  • A 5% bonus on a test
  • Extra time to turn in an assignment

[Note to teacher: It is up to the teacher to determine how records will be kept. Using a large spreadsheet chart that is posted in the classroom and "paying" the student to serve as recorders is one possible way to do so. Another way of doing this is to have each student keep their own spreadsheet to record how they benefited or how they incurred costs each week. This is another opportunity to have the students use their entrepreneurial ability. A contest could be held to see which student can devise the best and most efficient method of data collection. A reward can be "paid" to the winner.

Another thing this teaches is that money is valuable for what it buys, not for any intrinsic value. It might be useful to point this out to the students if they think it is "stupid" to make "play" money.]

Evaluate the following alternative solutions to this problem.

  1. Look at the 6 choices from the following survey. Analyze the possible costs and benefits of each privilege. How would each of these potential rewards help overall classroom behavior? How would each of these potential rewards hurt overall classroom behavior?
  2. Which privilege would provide the best incentive for positive classroom behavior at the least cost to the rest of the class?
  3. Enter your choice in the following survey and compare it to the choices made by other students who have completed this lesson.

Take Survey

[Note to teacher: The teacher is in control of how much value is assigned to different objectives. For instance, students could earn $2 per day for attendance, $1 for every assignment that is completed, and so on. It is a good idea to give random bonuses for behaviors you want to reward. In turn, negative behaviors such as tardiness should result in a fine. Students might be charged $1 per day for each instance of tardiness. If they are absent, they will not receive any money for that day. Detention or office referral should also cost them a minimum of $2. It is up to the teacher to determine the final dollar amount and the activities that could earn money or result in a loss of money. Determining the cost of other items should be determined based upon the results of the survey.

This is a program that can continue to use throughout the year if you would like to make it a normal part of your classroom management plan. In addition, you may use this program as a tool when introducing concepts from content standards 1 (dealing with limited resources), 8 (dealing with prices sending signals to buyers and sellers), and 19 (unemployment). It is also possible to modify the activity by introducing new elements such as more cash in circulation or limits on what can be purchased. Such modifications can be helpful in introducing the concepts of inflation and scarcity.]

The results of the survey should show your class which privilege is the most important and which is the least important. Based on these results, your students can now determine ways in which to earn "money" that can be spent toward the purchase of the above privileges. Each task/activity needs to be assigned a value so you and your teacher can keep track of how much each person in class has earned. For example, handing in an assignment on time may be worth more than showing up to class on time. A list of ideas has been supplied below to get your students started.

  • showing up to class on time
  • hand in an assignment on time
  • asking a relative, thought provoking question in class
  • individual attendance record
  • class attendance record
  • quiz score (average over a certain percentage and student/class earns extra cash)

Now that they have come up with ways to earn money that can be used to purchase the incentives, you need to decide what to use for cash. As a class, decide on a form of currency to use with the Classroom cash Program. A list of possibilities has been provided below.

  • poker chips
  • class/individual tally on chalkboard
  • punch cards
  • checkbook

Finally, before implementing the Classroom cash Program your students must decide if there will be fines or penalties that can be charged during its use. For example, if students hand in homework late or are tardy to class, should they be penalized for their actions and if so how much?

You should now be ready to begin using the classroom cash plan in your own classroom. However, before starting, think about what makes things valuable to you while answering the following questions:

View Interactive Activity

  1. How has this program changed your approach to behavior while in the classroom?
    [Answers will vary.]
  2. What specific benefit have you seen from this program?
    [Answers will vary.]
  3. Have you seen any negative consequences from this program?
    [Answers will vary.]
  4. Would you like this program to be continued? Why or why not?
    [Answers will vary.]


While participating in the Classroom Cash Program, your students have experienced on a daily basis how an incentive can affect personal behavior. Have the students list as many economic concepts that were covered by this program as they can think of. Inform them to be prepared to share this with the rest of the class.


This program will provide opportunities for daily informal assessment. The incentives should improve the behavior and performance of most students in your classroom. The following questions can give you a chance for feedback.

View Interactive Activity

  1. What makes the items listed in the survey valuable to you?
    [Answers will vary.]
  2. Do you think students in other states would agree?
    [Answers will vary.]
  3. What is the subjective nature of incentives?
    [Each individual responds differently.] 
  4. Do the incentives have the same value across all states? Why or why not?
    [Answers will vary. Should resemble: No, incentives are subjective. Not only will individuals in different states respond differently to incentives but also within states.]
  5. Were there any items on the survey that you would not consider an incentive? Why or why not?
    [Answers will vary.]
  6. Why do you think the rewards listed would help or hurt classroom behavior?
    [Answers will vary.]
  7. Create a list of what costs you would put on different incentives (you may use those listed in the survey and others you have thought of).
    [Answers will vary.]

writingWhat do the students think of this activity? They will pretend they are in charge of asking the organization which "funds" their program with classroom cash for continued funding. Based on their own experiences with the program, they will write an essay that would explain their point of view. They will need to include a detailed explanation of the program and an analysis of its benefits. Make sure to include supporting visuals such as graphs, charts, and/or spreadsheets.


Have the students pretend they are the person/s in charge of the organization that "funds" them with classroom cash. They will determine if they will continue or cease funding for the program. Have them write an essay explaining their reasons why. Make sure they include a detailed explanation as to why they made their decision. Students will also need to include any supporting visuals such as graphs, charts, and/or spreadsheets.