August 12, 2014

1. Tennessee State Board of Education and Tennessee Department of EducationTeacher Compensation InitiativeEllen Sherratt, Ph.D., Center on Great Teachers and LeadersCarolyn Vincent, Ph.D., Appalachia Regional Comprehensive CenterTerry Lashley, Ph.D. Regional Comprehensive Center August 12, 2014

2. The mission of the Appalachia Regional Comprehensive Center (ARCC) is to provide high-quality, relevant, and useful technical assistance that enhances specific SEA capacities to undertake state education reforms successfully, support district and school implementation of reforms, and maintain effectiveness once our services are complete.

3. The mission of the Center on Great Teachers and Leaders (GTL Center) is to foster the capacity of vibrant networks of practitioners, researchers, innovators, and experts to build and sustain a seamless system of support for great teachers and leaders for every school in every state in the nation. www.arccta.org * info@arccta.org

4. Overview of Today’s Presentation • Introduction • Purpose for this Work • History of Tennessee Teacher Compensation Reforms • Research-base on Teacher Compensation • Two Market-based Teacher Compensation Examples • Other Emerging and Innovative Practices in Teacher Compensation • Practical Questions and Considerations • Suggestions • Summary • Questions, Comments, and Reflections www.arccta.org * info@arcc.org

5. Introduction • Teacher Compensation Initiative began in February 2014 • Refined through webinars, conference calls, multiple drafts/outlines, and in-person meetings • Collaborative efforts of • Tennessee State Board of Education • Tennessee Department of Education • Center on Great Teachers and Leaders • Appalachia Regional Comprehensive Center www.arccta.org * info@arcc.org

6. Purpose For This Work • Follow up on 2013 Basic Education Program (BEP) Review Committee’s discussion on teacher compensation and market pay • Provide market-based teacher compensation information for BEP Committee • Present literature and evidence on the effectiveness of market-based teacher compensation to build capacity for informed decision making www.arccta.org * info@arcc.org

7. Market-Based Compensation Market-based compensation is defined as the alignment of teachers’ salaries with the salaries available in other labor markets. www.arccta.org * info@arcc.org

8. Tennessee’s Teacher Compensation Reforms 1984–1997Comprehensive Education Reform Act and Career Ladder Program 1995–2002 Salary Equity Plan 2004 Teacher Salaries Added to BEP 2007–2010 Differentiated Pay Plans 2010 Tennessee State Law Revised 2010–PresentRace to the Top and Competitive Compensation Initiatives Competitive Supplemental Fund Innovation Acceleration Fund 2013–Present Differentiated Pay Plans www.arccta.org * info@arcc.org

9. Tennessee’s Teacher Salaries In 2013, the average classroom teacher salary was $47,563 (Tennessee Department of Education, 2013). This ranks Tennessee 40th in the nation in terms of the average salary teachers are paid and 40th in the nation in terms of growth in teachers’ salaries since 2003–04. Market-based compensation suggests that, when setting pay levels for teachers as a whole and within particular subject or geographic areas, salaries offered by competing employers should be a central consideration. www.arccta.org * info@arcc.org

10. Overall, how should the research be characterized? • The weight of the evidence suggests that salaries do matter to teachers • Higher salaries were associated with lower teacher attrition • Teacher shortages could be reduced by improving teacher compensation • Evidence on differential pay policies is lacking or less promising www.arccta.org * info@arcc.org

11. What are the benefits and limitations of relying on survey-based research? • This type of research represents perceptions or beliefs, not behaviors • On a sensitive topic such as compensation, response may be subject to socially acceptable response bias • Nature of the questions asked may cause teachers to respond very differently about the impact of compensation www.arccta.org * info@arcc.org

12. What does the survey research literature suggest about teacher compensation and teacher retention? In a survey of former teachers, poor salaries was at the top of cited reasons for dissatisfaction for teachers who moved to other schools (49%) and for teachers who left the profession (61%). www.arccta.org * info@arcc.org

13. What does the survey research literature suggest about the importance of compensation for teacher effectiveness? National Survey Question: What one thing would you change in order to improve the teaching profession? • Most popular response, changes in policies and practices • Second most popular response, change in salaries www.arccta.org * info@arcc.org

14. What does the econometric/observational research suggest about the importance of compensation for teacher retention? • Suggests that rather large salary increases may be required to effect significant improvements A meta-analysis concludes that salaries are an important factor influencing the retention of beginning teachers and, even more so, experienced teachers. www.arccta.org * info@arcc.org

15. What does the econometric/observational research literature suggest about the importance of compensation for teacher recruitment? • There are fewer studies in the United States on the relationship of teacher salaries and recruitment • It is estimated that a 10% percent salary increase would result in 0.7 percentage point increase in university graduates choosing teaching as a career www.arccta.org * info@arcc.org

16. What does the econometric/observational research literature suggest about the importance of compensation for teacher effectiveness? • Mixed results • Conflicting research studies: • One study - little evidence of a strong positive effect of teacher compensation on student achievement • Another study- a positive effect with a $25K bonus and $27K base salary increase www.arccta.org * info@arcc.org

17. What are the benefits and limitations of relying on econometric/observational research? • Benefits—examines actual results • Limitations: • Lack of substantial experimentation by states and districts actually paying market-level wages • Lack of available data sets—cannot measure other outcomes (social, emotional, etc.) www.arccta.org * info@arcc.org

18. What is the evidence on teacher salaries for specific groups of teachers, such as mathematics/science teachers or teachers from Generation Y? • Effective (“irreplaceable”) teachers: • Only 6% cited compensation as why they stay, although 29% said higher pay would make them feel more appreciated • 10% did mention pay as a drawback • Highest-ranked drawbacks were insufficient classroom resources and bureaucracy/paperwork www.arccta.org * info@arcc.org

19. What is the evidence on teacher salaries for specific groups of teachers, such as mathematics/science teachers or teachers from Generation Y? • Science, technology, engineering, mathematics (STEM): • Higher effect on these teachers • More options outside the profession www.arccta.org * info@arcc.org

20. What additional research underway will address the questions previously cited? • Fall 2014 Mathematicareports to be released: • Impact of paying teachers the market rate of $125,000 with an annual bonus available of $25,000 (New York City’s Equity Project) • Impact of 11 grantees of the 2010 five-year federal Teacher Incentive Fund initiative • Assessed for 250 schools in 15 school districts www.arccta.org * info@arcc.org

21. What can be learned from internal/external program evaluations of teacher compensation reform initiatives in other states and districts? • There have been numerous experiments. • Most are not market-based. • There is a lack of rigorous evaluation. • There are some potentially promising programs (still underway) www.arccta.org * info@arcc.org

22. TWO MARKET-BASED COMPENSATION EXAMPLES: Douglas County, Colorado and New York City’s Equity Project www.arccta.org * info@arcc.org

23. Douglas County, Colorado Began in 2012–13 For new hires: • Returning teachers received a raise plus retention bonus • 2013–14: • All teachers’ wages on the new salary scale

24. Douglas County, Colorado: Funding Structure and Theory • Six salary bands based on content area and grade level • Theory: • Higher salaries in shortage areas to attract more teachers to those areas; lower salaries will signal a market reality for “easy-to-staff” positions • Fully funded with the existing salary resources • Controversial approach that has not been studied www.arccta.org * info@arcc.org

25. New York City’s Equity Project Charter School • Began in 2009 in Washington Heights neighborhood • School serves Grades 5–8 • Each teacher receiving $125,000/year with an annual bonus available for up to $25,000 • Goal to attract and retain high-quality teachers www.arccta.org * info@arcc.org

26. New York City’s Equity Project Charter School Three Strategies • Rigorous qualifications—teachers are experts • Redefined expectations—professional workday to include daily peer observations, co-teaching, six-week summer development institute, professional growth sabbaticals every 5–6 years • Revolutionary compensation—$125,000 plus a bonus based on school-wide performance www.arccta.org * info@arcc.org

27. New York City’s Equity Project Charter School Theory • Recruiting excellent teachers for every student is feasible if salaries more closely reflect the labor market pay for professionals with the right mix of talent, skill, and dedication. Evaluation is due out in fall 2014. www.arccta.org * info@arcc.org

28. OTHER EMERGING AND INNOVATIVE PRACTICES www.arccta.org * info@arcc.org

29. What are the emerging practices, challenges, and lessons learned by states and districts? • What are other innovative approaches to increase teacher compensation, particularly in shortage areas, have been implemented? • Public Impact’s Opportunity Culture Model: • Metro Nashville Public Schools’ Innovation Zone • Charlotte-Mecklenburg Schools and Project LIFT • The Opportunity Culture Charter School Network: Foundations Prep, Ingenuity Prep, and Venture Prep • The Indiana Charter School Board • Syracuse City School District: Four high-need schools in New York’s 5th largest district • Cabarrus County, North Carolina www.arccta.org * info@arcc.org

30. Public Impact’s Theory Public Impact estimates that its models can increase excellent teachers’ compensation by up to 130% within existing budgets. www.arccta.org * info@arcc.org

31. Teacher Incentive Fund Grantees • Develop and implement sustainable, performance-based compensation systems for teachers, principals, and others in high-need schools in order to increase educator effectiveness and student achievement • Implement comprehensive human capital management. • Six 2012 TIF grants had a specific focus on STEM teachers • Tennessee received funds in 2012 www.arccta.org * info@arcc.org

32. Teacher Incentive Fund: South Carolina • Focused on recruiting and retaining teachers to strengthen STEM • Partnered with seven LEAs and the National Institute for Excellence in Teaching’s Teacher Advancement Program • Incentives for STEM teachers $7,500 for hard-to-staff subjects in high-need schools based on their effectiveness; $3,750 in years 2 and 3 Type of incentive: Limited duration www.arccta.org * info@arcc.org

33. Teacher Incentive Fund: Houston Independent School District • Focused on teacher effectiveness and student learning growth (school level and individual teacher level); preparation for college and careers • Funded in 24 high-need schools serving traditionally underserved students • Incentives for STEM teachers—$10,000 sign-on bonus for transfers, and retention bonuses of $5,000 for STEM teachers evaluated as effective/or highly effective and meeting student growth targets Type of incentive: limited duration www.arccta.org * info@arcc.org

34. Differentiated Compensation for New Math and Science Teachers: Georgia • Funded under the Quality Basic Education Program approved by the Governor and legislature and funded in year 1 at $9.59m • Compensation linked to certification • Provision made for Grades 6–12 (accelerated salary steps) and K–5 ($1,000 for each new math/science endorsement) • Estimated incentives for STEM teachers ranged from $3,350 to $6,577 • Type of incentive: salary schedule modification www.arccta.org * info@arcc.org

35. Comprehensive Teacher Incentive Program: Guilford County, North Carolina • Recruitment incentives for teachers ranged from $2,500 to $10,000 and performance incentives ranged from $2,500 to $5,000 in year 1. • Incentives for STEM teachers ranged from $9,000 to $10,000. • Program was expanded in 2010 to add a recruitment $5,000 incentive for teachers of biology and chemistry, and teachers of exceptional children. • Initially district funded by $2,073,624 in local funding • Increasing 5th class sizes by 0.5 students • Leaving 30 teaching assistant positions vacation • Later funded by Two TIF grants ($8M and $23M) • Type of incentive: limited duration www.arccta.org * info@arcc.org

36. Ohio STEM Teacher Signing Bonuses • Ohio’s biennial budget promoted statewide STEM initiatives funded at $26,900,000 to increase the supply of STEM and secondary foreign language teachers. • STEM teacher signing bonuses were up to $20,000 for hard-to-staff schools for 5 years (choice of $4,000 bonus or loan forgiveness per year). Type of incentive: limited duration www.arccta.org * info@arcc.org

37. Virginia Pilot of STEM Teacher Recruitment and Retention Incentive Awards • 2012 “Opportunity to Learn” program from the Virginia Governor • Focus to attract, recruit, and retain new teachers of mathematics, physics, and technology education • Candidates to have satisfactory performance evaluation after the year of teaching for $5,000 award and then to earn another $1,000/year for three following years • 2014 program expanded with an amended budget Type of incentive: limited duration www.arccta.org * info@arcc.org

38. Have any compensation reforms taken place within the existing school budget? • Douglas County, The Equity Project, and Opportunity Culture have increased salaries of some teachers by cutting other staffing costs in several different ways: • Douglas County: Used surplus area teacher funds • The Equity Project: Reallocated the regular school budget with: • Teachers assuming administrative responsibilities • Fixed electives • Other creative staffing solutions • These reallocations resulted in significant budget surpluses www.arccta.org * info@arcc.org

39. Where have business community members assisted in supporting teacher compensation that is closer to market-based? • Austin, Texas: • Collaboration of the district, the Teachers’ Association, and the Chamber of Commerce • Performance-based pilot in several high-need schools • A task force created by the chamber to garner other support www.arccta.org * info@arcc.org

40. Where have business community members assisted in supporting teacher compensation that is closer to market-based? • Jacksonville, FL: • Business leaders pooled $5M each for a total of $40M to provide $20,000 bonuses for high-performing teachers in the most troubled schools www.arccta.org * info@arcc.org

41. What can be learned informally or anecdotally from market-based teacher salary initiatives in other states and districts? • This is not a new idea; the 1983: A Nation at Risk called for teacher compensation that was performance-based, market-sensitive, and professionally competitive • Most existing programs pay less than what is needed to retain teachers in high-need schools • Leaders of new approaches that pay teachers significantly more speak positively of the initial outcomes www.arccta.org * info@arcc.org

42. PRACTIAL QUESTIONS AND CONSIDERATIONS www.arccta.org * info@arcc.org

43. Strategies, Resources, and Stakeholder Communication and Engagement Key questions to consider: • What are the new cost areas? What are the costs associated with changing internal practices and requirements? • What cost areas will likely grow over time? • What is the projection for the number of eligible employees? • What is the cost of maximum possible success? www.arccta.org * info@arcc.org

44. Strategies, Resources, and Stakeholder Communication and Engagement • Which cost areas will provide only temporary spikes? • What will be the sources of funds? • Is a funding source adequate for the size and duration of costs? • Are funding sources protected for long-term sustainability? www.arccta.org * info@arcc.org

45. How have states and other districts financed market-based compensation? What approaches exist to pay salaries that are market-based within existing resources? • Redeploying current state, district, or school resources • Repackaging federal and state categorical aid programs • Replacing core components of the single salary schedule • Redirecting future resources or expenditures • Seeking philanthropic grants or corporate support • Obtaining additional public funding (e.g., taxes) or additional state aid through appropriations • Applying for discretionary federal grants www.arccta.org * info@arcc.org

46. Suggestions from Public Impact’s Opportunity Culture • Replace team-teaching positions with paraprofessional(s). • Offer some team-teaching roles with shorter work hours and proportionally lower pay. • Increase class sizes slightly (within limits) by a teacher’s choice. • Shift nonclassroominstructional specialists back into classes in higher-paid “reach” roles. • Reallocate other spending that could be better used to raise teacher compensation. • Reduce new facilities costs by constructing fewer walls for fewer, larger rooms. www.arccta.org * info@arcc.org

47. SUGGESTIONS www.arccta.org * info@arcc.org

48. Funding Suggestions • Redirect future resources or expenditures • Seek philanthropic and/or corporate support • Obtain additional public funding—increase taxes • Obtain grants • Coordinate funding sources www.arccta.org * info@arcc.org

49. Effective Communication and Stakeholder Engagement Suggestions • Engage stakeholders—early and often! • Success requires attention to the public and stakeholders • Engagement can uncover potential unintended consequences and implementation challenges before they become problematic www.arccta.org * info@arcc.org

50. Effective Communication and Stakeholder Engagement Suggestions • Develop a comprehensive communication plan: • Use different forms of communication with the level of detail required for buy-in and support to multiple audiences • Repeat communications and program updates. • Have a dedicated website • Establish a good working relationship with local media • Ensure that local education agencies have effective communication plans and systems www.arccta.org * info@arcc.org