Goals for the workshop The case for incentives Salary scales Design of incentive systems What is rewarded Who is reward

1. Goals for the workshopThe case for incentivesSalary scales Design of incentive systemsWhat is rewardedWho is rewardedWho decides on award

2. Goals for the workshopThe case for incentivesSalary scales Design of incentive systemsWhat is rewardedWho is rewardedWho decides on award

3. Workshop goals - today • Share best practices and review lessons of policy implementation with the establishment of incentive systems in other countries • from the perspective of those in government who initiated related policies and practices… … as well as those who were confronted with delivering them at the frontline • Government • Why and how did governments conceptualise incentives • What did they do to implement them, and what obstacles did they face during implementation • What results did they get out of this • What would they do differently if they could start all over • The profession • Towhatextentwhere the reform goals shared (and why) • How was the implementation managed and perceived • What would they do differently if they could start all over .

4. Workshop goals - tomorrow • Implications for Mexico • Points of agreement as to what Mexico can learn from other countries’ experiences • Prioritising the challenges which Mexico will face in establishing incentives structures and stimuli • Implications for the work of the Allianza

5. Goals for the workshopThe case for incentivesSalary scales Design of incentive systemsWhat is rewardedWho is rewardedWho decides on award

6. The quality of educational outcomes cannot exceed the quality of teachers Percentiles 90th percentile Student with high-performing teacher* Two students withsame performance Student performance 37th percentile Student with low-performing teacher** * Among the top 20% of teachers ** Among the bottom 20% of teachers Source: Sanders & Rivers Cumulative and Residual Effects on Future Student Academic Achievement

7. The case for incentives • Incentives are about… • Giving teachers signals that better work will make a difference for them • Incentives have many dimensions… • Fostering an attractive work environment • Establishing and facilitating career perspectives • Providing access to professional development • Identifying and spreading effective teaching practices … better pay for better work is just one of them.

8. The case for incentives • Incentives can… • Be a catalyst for change • Improve efficiency of recruitment • Support a culturebased on evidence and data • Better access and use of student achievement data allows teachers to better identify and address key needs, set more appropriate achievement targets, and more closely monitor progress • Unleash initiative for teachers to look actively for ways to improve their performance and increase their interest to actively taking advantage of opportunities … if they are supported by • Accurate and reliable data on the quality of outcomes • Strong feedback mechanisms and access to professional development • Ensuring that teachers not receiving merit pay understand what they can do to improve performance and have incentives to change behaviour • Effective human resource management and school leadership .

9. The case for incentives • Single-salary schedules had their time… • Combat inequities in job allocation • Eliminating unprofessional preferential treatment during evaluation processes … but may not take education to the level of productivity needed • Most of teacher effects are not explained by teacher characteristics and formal qualifications • In the absence of externalities or information problems, payment for outcomes always trumps payment for inputs in terms of raising overall productivity • Hiring practices: Information deficiencies in the hiring process can be ameliorated by subsequent employer performance assessments • Labour-market selection: A performance-related pay programme will attract and retain individuals who are particularly good at what the incentives are attached to

10. The case for incentives • Replacing single salary scales with systems that connect the difference teachers’ make to their compensation… … in meaningful ways that can be embraced by employers and teachers… … faces tough requirements • Individual, team or organisational outputs can be accurately and meaningfully measured • Outputs contribute to organisational performance • Pay can be administered in a way that capitalises on its expected incentive value for potential recipients • Better pay eventually translates into better teaching .

11. Goals for the workshopThe case for incentivesSalary scales Design of incentive systemsWhat is rewardedWho is rewardedWho decides on award

12. Comparing teacher salaries • In purchasing power parities • Easy to do but not always relevant • Mexican teachers may care less about whether they can buy more groceries than Japanese teachers than whether their salaries are competitive compared with other similarly skilled professions • Relative to average national income • Depends on national job structures • Comparing Mexican teachers with the average farm and industrial worker? • Highly qualified young people today may be less interested in a fair day’s pay for a fair day’s work than in an outstanding day’s pay for outstanding work • Other factors entering the equation, e.g. • The way in which countries trade off salaries, class sizes, student-staff ratios, teaching hours for teachers, instruction hours for students… … determines costs per student … creates the working conditions that attract or deter teacher recruitment and retention

13. Teachers’ salaries (minimum, after 15 years experience, and maximum) in lower secondary education (2006)Annual statutory teachers’ salaries in public institutions in lower secondary education, in equivalent USD converted using PPPs EquivalentUSD converted using PPPs D3.2

14. Structure of salary scale of teachers in selected countries, lower secondary (2006)

15. Ratio of salary after 15 years of experience to GDP per capita in lower secondary education (2006) D3.2

16. Adjustments to base salaryAdditional yearly payments received for the following criteria (28 countries providing data) * Including Mexico

17. Influence of school evaluations by an inspectorate -Lower secondary education 2006 ( no, low, moderate, high impact)

18. Goals for the workshopThe case for incentivesSalary scales Design of incentive systemsWhat is rewardedWho is rewardedWho decides on award

19. Design of incentive systems • Incentives in use in OECD countries • Signing bonuses and forgiveness of teacher education • Higher compensation in the early years • To attract people concerned about initial pay and less interested in the benefits they get as they become older • Australia, Denmark, England, Finland, Norway and Scotland • Escalating pay in the later years • To retain experience teachers who might otherwise leave • Austria, Japan, Portugal mid-career, Greece, Hungary and New Zealand experienced teachers • Extra pay and benefits to attract teachers of shortage subjects or to challenging schools • Bonuses based on teachers’ contributions to improved student performance • Salaries based on agreements teachers work out with principals • To respond to principal’s priorities for the school .

20. Design of incentive systems • What is rewarded? • Market incentives • Getting teachers into remote areas or challenging schools • Knowledge and skills / qualifications • Increased pay linked to additional qualifications or demonstrated skill • Establish a career path for excellent teachers to remain in classrooms • Spread innovation beyond classrooms and school • Merit • Rewarding teachers for their performance and that of their students • Ranges from compensation based on supervisor evaluations and portfolios created by teachers to payments awarded on the basis of student growth at the teacher, group and or school • Who is rewarded? • Team or group-based incentives • Should incentives be directed to individual teachers or the teams or schools they serve? • Who decides / adjudicates? • What are the criteria for awarding incentives and what is the role of school leaders and external evaluators in assessing these? • Trade-offs between objectivity and relevance • Principal evaluation remains a predictor of student achievement even when teacher value-added is included in the model .

21. Design of incentive systems (1) • Some challenges • Devising evaluation systems that accurately measure the contribution of teachers to the education of students while avoiding that • Structural misalignment between the mission of schools and the outcomes to which incentives are attached: A focus on what can be easily tested can narrow teaching and the curriculum • Bonuses based on student performance on low level reading and math tests are unlikely to produce high level performance in any subject • Short-term priorities for improving immediately observable outcomes can undermine more desirable long-term outcomes • Almost any incentive system can be gamed and needs to be monitored • Initially, pay may be determined by student performance on tests of literacy and mathematics, to the exclusion of many other no less important areas of learning, but the use of such measures may decrease as teachers become more comfortable with the basis on which school leaders make their decisions on who should be hired and who should be promoted

22. Design of incentive systems (2) • Some challenges • Separating the contribution of previous teachers from those of current teachers • Major advances in longitudinal student-level data increasingly allow to estimate value-added contributions at the school, grade and teacher levels • Avoiding that the competition for higher salaries sacrifices collegiality of teachers • Individual rewards may reduce incentives for teachers to collaborate and, as a consequence, reduce rather than increase school performance, or the team dynamic between teachers and with administrators can be damaged • Particularly when incentives are awarded in a ‘zero-sum’ game • Team incentives may work well in small teams where there is mutual monitoring coupled with an easy information flow among team members and options for teachers to reciprocate among each other • Determining the ‘right amounts’ • Performance bonuses that are a fraction of what they are in private industry cannot be expected to produce the same results • Avoiding that bonuses distort outcomes .

23. Design of incentive systems • Limited empirical evidence • Lots of initiatives short-lived • Some of the more successful examples started with… … Defining a set of standards for teacher performance together with measurement systems for teacher performance that both teachers and administrators agree will fairly evaluate teachers against the standards … Group-based systems based on teachers’ knowledge and skills .

24. Swedish system of individualised school-based pay introduced in 1996 • Criteria for salary decisions • Teacher qualification areas • Labour-market situation • In regions or subjects with acute shortages salaries can be higher • Teacher performance • Pay rises linked to performance • Range of responsibilities • Evaluation • Local authorities and unions run joint Council to determine long-term effectiveness of the system • Each group is conducting its own evaluation

25. Thank you ! • www.oecd.org • Email: Andreas.Schleicher@OECD.org … and remember: Without data, you are just another person with an opinion