Overview of Teacher Compensation Issues

1. Overview of Teacher Compensation Issues Prepared for Monroe County Florida Allan Odden March 3, 2010

2. Contents • Assumptions • Reasons to Change the Salary Schedule 3. New Objectives for Teacher Compensation 4. Elements of Teacher Compensation 5. Key aspects of possible change: • Wage premiums for special circumstances • A salary structure based on teacher performance • Performance bonuses based on improved student achievement

3. 1. Assumptions • Prime goal of schools is to improve student (performance) • Major route to that goal is the teacher, and improved instructional practice – teacher performance • Best way to improve instructional practice is to organize teachers is into collaborative groups using student performance data to improve instructional strategies • Strategic management of talent is that which uses both measures of instructional practice (teacher performance) and measures of teacher effectiveness (student performance) in all HR programs -- recruitment, induction, evaluation, professional development, career progression, compensation and dismissal • Key need: performance-based measure of each teacher’s instructional practice and effectiveness • These ideas apply to administrators too

4. 2. Reasons to Change the Teacher Salary Schedule • Most important reasons should be strategic • Primary education goal – improved student achievement • Primary way to attain that goal – get the most effective instructional practices into every classroom – staff every classroom and school with effective teachers • Insure that each teacher has the instructional expertise needed to teach students to rigorous performance standards, including problem solving and application • Change the salary schedule to make it align with these strategies • Is also good politics – public likes performance pay

5. Current Compensation Structure Does Not Support Current Goals • Elements in current schedule– years of experience, education units and degrees – neither linked strongly to the key education goal (higher achievement) nor to the route to that goal (more effective instruction) • Redesign with elements that are linked to student learning gains – Teacher knowledge, skills and instructional expertise • No pay element directly linked to improved student achievement • Create such a new pay element

6. 3. Goals and Objectives for Teacher Compensation • Recruit and retain effective teachers • In all districts • In places experiencing shortages • Urban and some rural districts • Some content areas – math, science, technology, etc. • Enhance the instructional expertise of all teachers to world class levels, with a focus on problem solving and application • Have teachers focus like a laser on improving student academic achievement

7. Specific Objectives to Attain • Set market competitive salary levels – education and the broad labor market as well • Identify the wage premiums needed in shortage areas – urban/rural, math and science, high poverty schools • Identify an instructional vision that can attain these goals and an aligned performance assessment system, and use the results in a new pay structure • Incorporate student performance targets into a new teacher pay element

8. 4. Elements of Teacher Compensation • Base Pay* • Variable Pay* • Base pay + Variable Pay = Cash Compensation* • Benefits • Career Opportunity • Working Conditions – addressed by school finance adequacy proposals *Pay elements which I will discuss

9. Base Pay • The monthly check – the most important aspect of pay, bulk of pay dollars • Beginning pay – critical for recruiting new individuals to teaching • Average pay – critical for retaining teachers in the system, especially the best teachers • Base pay progression – what earns the annual raise – replace or augment years and degrees with measures of instructional performance

10. Variable Pay • Based on organizational performance – increased student academic achievement • Provided as an annual bonus – not added to base pay • Variable because the bonus is paid only if the performance improvement is made • Important when improved organizational performance is critical – which is the case today in education

11. With such a new pay framework, more money would be earned: • When teacher’s instructional practice improved • When student performance improved • Thus making the pay system reinforce the prime goals of the education system – greater teacher effectiveness and higher student achievement

12. Other Pay Elements • Benefits – teacher benefits are generally quite good relative to other occupations, particularly private sector jobs • Career Opportunities – will be included in the knowledge and skills-based structure we propose • Working conditions – addressed by all the evidence-based recommendations

13. 4a. Wage Premiums: Subject Areas Shortages • Jobs similar to math, science and technology teachers • Accountants • Engineers • Computer/information technology • Professional level sales • Science – e.g., food scientists, zoologists, foresters, medical scientists, space scientists, chemists, environmental scientists • Probably requires $5000-10,000 premiums

14. 4a. Wage Premiums: High Need Schools • High poverty, high mobility, high ELL and/or low performance • Might also require $5000-10,000 premiums

15. 4a. Wage Premiums • For subject area shortages and high need schools: • Do not work by themselves • Work only within a comprehensive recruitment strategy • Work only with measures of teaching effectiveness and performance – only give the wage incentives to teachers who are effective

16. 4b. Base Pay Progression: Pay for Teacher Performance • A Knowledge and Skills Structure • Make improved instructional performance the primary factor that produces pay increases over time • Include other factors as well • Build the schedule on the factor that research shows is most linked to student learning gains – instructional practice

17. Base Pay Progression • Should base pay progression be linked to student learning gains? • NO • Base pay is the part of the compensation system where the system is “buying” teacher assets • Need to buy assets that matter • Key asset today is instructional expertise • Variable pay is the element linked to student achievement

18. However ….. • Consider adding a base pay progression element that is linked to student learning gains • Yes, it can not affect all teachers • Yes, it is very controversial • Yes, there are technical design challenges • BUT, it provides political support-- DENVER

19. Critical Need • A Way to measure teacher instructional practice to multiple (4-5) levels of performance

20. Who Should Develop the System to Measure Teacher Performance? • The STATE – perhaps via Race to Top • Districts may not have the expertise, though several districts have done so – Cincinnati, Washoe County, TAP schools • A common evaluation system allows comparability between districts if some pay elements are designed locally • In this way, the state can sponsor an ambitious instructional vision, one that can educate students to world class levels

21. Examples of Systems to Measure Teacher Performance • Evaluation system part of the Teacher Advancement Program (TAP), used all over the country • Danielson Framework for Teaching • New Gates Tools: • Video, test of pedagogical content knowledge, examples of student work • Gates video to replace direct observations

22. Curriculum-Unit-Based Portfolio • Knowledge of students, analysis of formative assessment data • Lesson Plans • Formative and common end-of-unit tests • Evidence of actual classroom practice – Gates videos rather than observations • Strategies for struggling students – differentiated instruction • Reflections on how the unit worked

23. Score from a Measure of Teaching Practice • Summative scores • 1, brand new teacher • 2, novice teacher, after 1-3 years of teaching • 3, solid effective teacher, tenure level? • 4 and 5, advanced and accomplished practice • Detailed profiles of sub-component performance

24. Possible KSBP Structure • A salary schedule based primarily on teacher performance • Assume the measure of teacher performance is “valid,” i.e., linked to gains in student learning via value-added analysis • Gates is calling this a measure of teaching effectiveness

26. Aspects of this New Structure • Major pay increase is based on instructional performance – 10 % between categories • Some step increases – 1.5 % • Pay can top out at different levels if instructional performance does not increase • Includes wage premiums for math, science, MA, Doctorate, and National Board Certification • Needs operating and transition rules • Key principle: move everyone on at current pay level

27. 4c. A Variable Pay Element • Linked to organizational, usually school, performance – student achievement • Based on IMPROVEMENTS in student achievement – above historical trends • Annual bonus • Needs to be re earned each year • Each year the target is raised • So bolsters schools as continuous improvement

28. Examples of Variable Pay Bonuses • Kentucky, North Carolina, Texas and a few other state programs • Charlotte Mecklenburg • Vaughn Charter School • Houston and Dallas (using value added) • Denver • New York City

29. Nine Key Design Issues • Identify key performance elements – mostly student academic achievement • Determine how they will be measured – state tests • Determine how to calculate improvement – simple change, change to a standard (AYP), value added – above measurement error

30. On Value Added for Teachers • Can do only for teachers who have students with tested subjects • So currently covers less than 50% of teachers • Need at least 2 and probably 3 years of data for stable results • Need a “clean” data base – most districts do not have this, but the Florida system is the best in the country

31. Nine Key Design Issues …… • Create a level playing field – mobility, poverty, ELL, etc. • Specify as a bonus, not addition to base pay • How large – 4-8 percent, so $2000-4000, and best to have multiple awards – threshold, target, above target -- Use of a balanced scorecard

32. Nine Key Design Issues …… • Awards to everyone in a school or to individual teachers -- Administrators and classified staff too • Write eligibility rules – specify up front as a bonus, do not have each school determine what to do with the money • Determine strategy if costs exceed budget

33. What About Denver? • Individual teacher professional development plans • Individual student achievement projects (really just a curriculum unit) • Value-added student learning gains • Market adjustments – subject shortages and high need schools • Teacher evaluation

34. What About Most Plans • Bonuses based on student performance • Incentive for high need schools • Incentives for subject shortages • But …… All these leave the basic schedule unchanged, and it consumes the most salary dollars and does not send messages aligned with current strategic directions of the education system

35. What About TAP? • Excellent model • Incentives for: • School wide student performance gains • Individual teacher student performance gains • Individual teacher evaluation • Includes professional development and staff to operate the program • Leaders for collaborative teacher teams • Master Teachers • Each earns a salary supplement

36. “Macro” Decision Areas • Decide where to be in the labor market – at the market, behind or leading the market • Degree of interest in changing the salary schedule – from the traditional schedule in current allocation model to one based on teacher performance– extreme makeover, middle or the road, or modest change • Degree of interest in wage premiums • Degree of interest in bonuses based on student performance

37. Final Comments … • Prime Goal: Higher levels of student achievement • Key education variable linked to that goal: the Teacher • Identify an instructional vision that can accomplish the goal • Create a development system that helps teachers learn those instructional practices

38. Final Comments … • Create a KSBP salary structure that makes the primary element that produces pay increases over time improvements in that instructional expertise – teacher performance • Bolster with a variable pay element directly linked to improvements in student performance • Pay teachers individually for what they know and can do, and both indivdiually and collectively for what they produce in terms of student learning gains.

39. How to Contact Me Allan Odden Strategic Management of Human Capital Consortium for Policy Research in Education University of Wisconsin-Madison 608 263 4260 arodden@wisc.edu