Tag Archives: Teacher Compensation

Who Are the Winners and Losers in Performance-Based Compensation?

The other day I left a working session with a client where we were tackling the question of whether and how their team members should be compensated based on performance. Inevitably, it was a challenging and values-laden conversation. Performance-based compensation is an approach where some or all monetary compensation is related to how employee performance is assessed relative to stated criteria. This model is intriguing enough that it comes up in virtually every compensation or performance management project I’ve ever been involved in.

What does research tell us so far about compensation approaches? Most teacher compensation systems, in an attempt to be fair, base rewards off of years of experience and educational attainment using a “step and lanes system. Yet, research shows that advanced degrees have little effect on student academic success except in the areas of math. And while teachers’ increasing experience in the early years leads to greater student achievement, there is limited evidence that teachers continue improving after five years on the job. With recent attempts at less-traditional approaches involving performance-based compensation, we have learned a great deal about how compensation can help retain our most effective teachers and therefore improve student achievement. Yet the “perfect” organizational compensation plan remains elusive.

Why is there still no playbook we can all follow around performance-based compensation? Because every compensation decision is about tradeoffs, which means there are winners and losers. I have yet to meet an administrator who wants to pay their educators less, yet there is a literal fixed pie that goes into school budgeting decisions, and educator compensation is by far the biggest piece of that limited pie. While we might want a world where we can keep everyone’s pay at least as good as it is now and provide incentives for our strongest teachers to stay in the classroom, that extra money has to come from somewhere (and hopefully a funding source that won’t be gone in a couple of years).

So let’s look deeper at some of the tradeoffs that apply to three different types of performance-based compensation:

1. Stick with a traditional “step and lanes” system, but teachers only move up a step if they meet a minimum specified level of performance

What is this? This is the simplest variation from the traditional experienced-based step schedule we often see in education, and therefore the one most likely implemented in larger districts or those just testing the waters. Truly low-performing teachers stop seeing automatic increases every year. In systems with early teacher tenure — where administrators may otherwise find themselves with low-performing, high-seniority teachers making far more than newer highly effective teachers — limiting increases to those meeting a specified performance level can mitigate limited resources going to low-performing teachers.

Who are the potential winners? The freed-up budget can then go to things that might benefit students, including classroom resources, aides, or other supports. If low-performers self-select out because of lower compensation, that frees up funds and teaching spots to bring in more effective teachers.

Who are the potential losers? This is a policy that sounds like a step in the right direction but might maintain the status quo (if all teachers are rated “effective” regardless of performance). High-performing teachers are potential losers as this policy does not incorporate higher pay for higher performance — it only helps to potentially weed out low performers. Continue reading

California’s Revised Bid to Kill Income Tax for Teachers is Still a Bad Idea

A bill providing tax credits to teachers in California is making its way through the state’s legislature. Last month Andy Rotherham and I wrote that Senate Bill 807, the Teacher Recruitment and Retention Act, is a gimmicky way to pay teachers more and takes a one-size-fits-all approach to solving a targeted teacher shortage problem.

It looks like the authors of SB807 may have noticed our critique. Since its introduction, the legislation has been revised. Instead of exempting all teachers who remain in the profession for more than five years from paying state taxes, the revised legislation is focused on teachers in high-poverty communities. The new language gives teachers in high-poverty schools immediate state tax relief on half of their income in their sixth through tenth years of teaching.

Admittedly, the revised legislation is better than the original because it takes a more targeted approach to teacher shortage issues. But it’s still a bad idea. As Andy and I wrote, if California legislators want to pay teachers more, then they should just pay teachers more. Providing teachers with tax incentives is a confusing way to raise teacher compensation and doesn’t get at the foundational issues of under-resourced schools and misaligned, archaic state and district teacher compensation systems. This bill — in any form — tinkers at the edges of and distracts from larger issues in California.

This week the bill passed the California Senate Governance and Finance Committee with a unanimous vote, and it’s now headed to the Senate Education Committee. But California lawmakers would be better off if they stop trying to revive this bill and, instead, focus on the larger school finance problems in the state.

Lessons Learned from 10 Years of Denver Public School’s Teacher Compensation System

In 2006, Denver voters approved a $25 million annual property tax increase to fund an innovative teacher compensation system for Denver Public School (DPS) teachers called the Professional Compensation System for Teachers, or ProComp. ProComp promised to align teacher pay and student learning. It’s probably safe to say that ten years later, ProComp is likely not in the place that its authors and advocates hoped it would be.

Soon Denver Public Schools and the Denver Classroom Teachers Association will negotiate changes to ProComp and how DPS teachers are paid. Not so serendipitously A+ Colorado, a Colorado research and advocacy organization, is out with a new report that details the history of ProComp and offers recommendations for improving it.

It’s worth analyzing the results of ProComp and considering its future because the system was at the forefront of attempting to connect teachers’ compensation to students’ academic achievement. With help from federal programs like the Teacher Incentive Fund, many districts have since tried similar teacher compensation tactics and others are in negotiations to give it a go. Why? Just like in any other profession, compensation is an incentive employers can use to attract, retain, and leverage human capital talent. But in education, there are a lot of complicating factors that make changing compensation structures difficult. So learning lessons from performance-pay system pioneers like Denver’s ProComp is useful for all districts doing this work.

Here are a few reasons why ProComp isn’t living up to its promise:

It’s unclear if ProComp impacts student achievement. Student achievement in DPS is up from 2006. But there is little evidence that ProComp is a cause of rising student achievement or is even correlated with it.

Teachers who lead students to higher academic achievement do not receive higher compensation under ProComp. One study found that due to how base salaries and bonuses work in ProComp, teachers whose students demonstrated the highest growth in math earned similar amounts to teachers whose students demonstrated the lowest growth in math.

Denver Comp Figure

Click to enlarge. Image via “A Fair Share: A New Proposal for Teacher Pay in Denver”

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