ERIC Identifier: ED446368
Publication Date: 2000-11-00
Author: Goorian, Brad
Source: ERIC Clearinghouse on
Educational Management Eugene OR.
Alternative Teacher Compensation. ERIC Digest Number 142.
Teacher compensation is gaining renewed attention in state legislatures and
school district offices as policymakers seek to attract and retain qualified
individuals to teaching and also explore creative ways to promote higher
educational and professional standards.
This Digest examines various alternative methods of teacher compensation
currently proposed or in practice in school districts around the country.
WHAT IS THE CURRENT STANDARD FOR TEACHER COMPENSATION?
single salary schedule, which pays individual teachers on the basis of their
years of experience and educational units or degrees, has been in place
nationwide for at least 50 years (Odden 2000). Attempts to unseat the single
salary schedule have largely foundered.
The 1980s saw significant experimentation with merit-pay and career-ladder
systems, which rewarded teachers financially based on performance reviews and
their willingness to take on extra responsibilities. The seemingly subjective
nature of administrator-led reviews created resentment among teachers and their
unions and was "at odds with the team-based, collegial nature of
well-functioning schools" (Odden). Odden asserts that virtually none of the
merit-pay systems enacted prior to the 1990s survives today.
WHY CHANGE THE SINGLE SALARY SCHEDULE?
resilience, the single salary schedule "seems to be always under attack" (Odden). Although predictable and fair, the current system, say its critics,
rewards mediocrity by valuing seat time over teaching skill. A tight labor
market, greater scrutiny from state legislatures, and new laws in some states
that encourage or even require changes in teacher compensation are among the
factors currently pressuring schools to raise salaries.
Demographically, the need for new teachers is rising to an epic level. The
U.S. Department of Education estimates that the nation will need more than a
million new teachers by 2010, nearly half the current work force of 2.6 million
in elementary and secondary schools. An estimated 50 percent of new teachers
leave the profession within five years, many of them citing money and
professional dissatisfaction as key reasons.
At the same time, policymakers seem unwilling to allocate more money to
schools without ensuring a return on their investment. Linking teacher pay to
student test scores, for example, is unpopular with many teachers and their
unions but may be imposed on school districts by legislators or district
WHAT ALTERNATIVES EXIST TO THE SINGLE SALARY
There are four main types of alternative compensation systems in
use today: (1) pay for performance, (2) knowledge- and skills-based pay systems,
(3) school-based performance award programs, and (4) compensation for
certification with the National Board for Professional Teaching Standards
Pay for performance. This concept generally links teacher pay to certain
performance benchmarks, notably student test scores. School districts in
Colorado, Minnesota, Indiana, and other states are experimenting with some form
of pay for performance linked to student test scores (Urbanski and Erskine
2000). This concept, like merit-pay systems of the past, is troubling to many
teachers who worry that pay will be linked to subjective factors outside their
control. The National Education Association recently rejected a resolution that
would have accepted pay for performance provided the systems were "clearly
stated," "subject to objective measurement," and did not use student test scores
to determine salaries (Archer, July 12, 2000).
One alternative school in Los Angeles ties dollar amounts to teachers'
demonstrated skill in lesson planning, literacy instruction, and the use of
technology. An administrator and a peer teacher conduct assessments four times a
year, rating the skills of those being evaluated. The teachers also rate
themselves, and their scores account for one-third of the total score.
Systems based on knowledge and skill. Some states, such as Ohio and Colorado,
are incorporating relatively new assessment tools produced by the Educational
Testing Service (ETS) and the Council of Chief State School Officers (CCSSO)
into their compensation systems. These tools, known as Praxis and INTASC
assessments, assess and test teachers' core content knowledge as well as
clinical teaching practices and pedagogy. Performance on these assessments is
one factor in earning increased pay, though both the Denver and Cincinnati plans
allow teachers to demonstrate acquisition of new knowledge and skills through
portfolios of their class-work and professional-development activities.
The Consortium for Policy Research in Education (CPRE) stresses that
knowledge- and skills-based compensation systems can and should reward teachers
for acquiring whatever skills a school needs. Thus, a plan could encourage and
reward teachers who learn skills such as budgeting and curriculum planning,
which might allow talented individuals to both teach and perform administrative
duties, instead of leaving teaching altogether for better-paying administrative
Systems based on school performance. School-based-performance award (SBPA)
programs generally tie financial bonuses to specific goals and benchmarks, such
as improving test scores in core subjects and reducing absenteeism and dropout
rates. Some school districts restrict the funds to school-improvement projects,
whereas others give bonuses directly to staff with no restrictions. In the
Charlotte-Mecklenburg district, schools set annual improvement goals based on
student achievement on standardized tests. The district grants staff
unrestricted cash bonuses for meeting their goals.
Maryland's program assesses student attendance and performance on two
standardized tests. Maryland's Department of Education awards cash bonuses to
schools but not to staff for meeting targeted goals. The Department also
releases report cards on state and district progress toward meeting standards,
thus creating incentives in the form of public approval and support or public
The CPRE believes that current SBPA programs do a good job of focusing
teacher and system attention on key educational goals and continuous
improvement. However, it argues that SBPA programs can be strengthened by
providing more clearly stated goals and consistent feedback so that teachers
know what is expected of them and what knowledge and skills they should strive
to acquire. It also calls for more consistent funding to assure teachers that
the bonuses will be available if they meet their goals.
Compensation based on certification. Certification through the NBPTS is
gaining recognition. About half the states provide financial incentives for
achieving board certification.
The certification process combines rigorous standards developed by the NBPTS
with a sophisticated, extensive assessment process to determine whether teachers
meet those standards. Many teachers who have been assessed testify to the rigor
and fairness of the process and claim that the assessments are the "best
professional development activities" in which they have been involved (Odden).
The assessment procedure is both long and expensive, and currently only about
40 percent of teachers who go through it earn board certification (Odden).
Many states are offering incentives for certification. For example,
California provides a one-time $10,000 bonus for board certification; North
Carolina offers a 12 percent pay raise for the life of the certificate; and
Florida grants a 10 percent salary increase for the life of the certificate and
an additional 10 percent bonus to those who mentor newly hired teachers
WHERE ARE ALTERNATIVE SYSTEMS IN PRACTICE TODAY?
is believed to be the first big-city public school district to scrap its
traditional salary structure entirely. Beginning in the 2002-2003 school year,
all teachers with less than 22 years of experience will be ushered into the new
plan (Blair 2000).
The plan contains five career categories and accompanying salary ranges, from
"apprentice" to "accomplished," with specific goals and standards attached to
each. Frequent, indepth evaluations will determine whether teachers advance,
stay in the same category, or slide back into a lower one. The plan is a
"knowledge- and skills-based" system, rewarding teachers for meeting goals set
by the district rather than student test scores.
Denver's closely watched pilot program offers three different
pay-for-performance plans. One is based on standardized test scores, another is
linked to achievement on teacher-made assessments, and the third takes into
account demonstrated acquisition of new knowledge and skills. Twelve elementary
schools are currently participating, but so far no middle or high schools have
signed on as hoped.
Douglas County, Colorado, has one of the oldest and most comprehensive
alternative compensation plans in the nation. The plan is multifaceted,
combining elements of both pay-for-performance plans and
The Teacher's Union Reform Network (TURN), a consortium of 21 unions around
the country, is experimenting with one or more forms of alternative teacher
compensation. Cincinnati, Columbus, Denver, Memphis, Miami, and New York City
grant unrestricted bonuses to staff under SBPA programs. Teachers in Los
Angeles, Minneapolis, Montgomery County, Rochester, and Toledo, among others,
receive significant cash bonuses for earning board-certification (Urbanski and
WHERE CAN SCHOOL DISTRICTS TURN FOR GUIDANCE?
Kelley (1997) provide a theoretical framework for new forms of teacher
compensation and offer examples of compensation innovations in place around the
country. The CPRE Teacher Compensation Project has developed four models that
illustrate different versions of what new pay systems might look like.
The Milken Family Foundation has produced a report (Solmon and Podgursky
2000) that argues most obstacles to performance-based compensation can be
overcome. It advocates experimentation with pay plans that incorporate key
elements of knowledge- and skills-based pay systems and performance-based
The American Federation of Teachers (AFT), National Commission on Teaching
and America's Future (NCTAF), and Education Week are also good sources for
research and information on alternative teacher- compensation plans around the
Archer, Jeff. "NEA Delegates Take Hard Line
Against Pay for Performance." Education Week 19, 42 (July 12, 2000): 21-22.
-----. "Changing the Rules of the Game." Education Week (June 14, 2000): 19,
24-30. -----. "Denver Pay-for-Performance Pilot Still Has Far To Go, Report
Says." Education Week 19, 42 (July 12, 2000): 10.
Blair, Julie. "Cincinnati Teachers To Be Paid on Performance." Education Week
20, 4 (September 27, 2000): 1, 15.
Consortium for Policy Research in Education at the University of
Wisconsin-Madison. "Why Change Teacher Compensation?"
"Questions and Answers on Teacher Compensation and Skills-Based Pay."
Kantrowitz, Barbara, and Pat Wingert. "Teachers Wanted." Newsweek (October 2,
Kelley, Carolyn; Allan Odden; Anthony Milanowski; and Herbert Heneman III.
"The Motivational Effects of School-Based Performance Awards." CPRE Policy
Briefs. Philadelphia, Pennsylvania: University of Pennsylvania, February 29,
2000. 12 pages. ED 440 473.
Odden, Allan. "New and Better Forms of Teacher Compensation Are Possible."
Phi Delta Kappan 81, 5 (January 2000): 361-66. EJ 599 065.
Odden, Allan, and Carolyn Kelley. Paying Teachers for What They Know and Do:
New and Smarter Compensation Strategies To Improve Schools. Thousand Oaks,
California: Corwin Press, 1997, 204 pages. ED 404 312.
Olson, Lynn. "Pay-Performance Link in Salaries Gains Momentum." Education
Week 19, 7 (October 13, 1999): 1, 18.
Solmon, Lewis C., and Michael Podgursky. "The Pros and Cons of
Performance-Based Compensation." Milken Family Foundation, 2000.
Urbanski, Adam, and Roger Erskine. "School Reform, TURN, and Teacher
Compensation." Phi Delta Kappan 81, 5 (January 2000): 367-70. EJ 599 066.
The following links contain information on various alternative plans and on
studies as well as specific information on the plans enacted in Cincinnati and
Douglas County, Colorado.
American Federation of Teachers: http://www.aft.org/research/index.html
Consortium for Policy Research in Education at the University of
National Board for Professional Teaching Standards: http://www.nbpts.org
National Commission on Teaching & America's Future: