Alternative Teacher Compensation
ERIC Identifier: ED446368
Publication Date: 2000-11-00
Author: Goorian, Brad
Source: ERIC Clearinghouse on Educational Management Eugene OR.
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
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?
The 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
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
WHY CHANGE THE SINGLE SALARY SCHEDULE?
Despite its 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
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
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 negotiators.
WHAT ALTERNATIVES EXIST TO THE SINGLE SALARY SCHEDULE?
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 (NBPTS).
WHERE ARE ALTERNATIVE SYSTEMS IN PRACTICE TODAY?
- 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
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 jobs.
- 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 criticism.
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
- Compensation for 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 (http://www.nbpts.org/where/).
Cincinnati 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 knowledge-and-skills-based plans.
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 Erskine).
WHERE CAN SCHOOL DISTRICTS TURN FOR GUIDANCE?
Odden and 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 knowledgeand
skills-based pay systems and performance-based systems.
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 nation.
This publication was prepared with funding from the Office of Educational Research and
Improvement, U.S. Department of Education, under contract No. ED-99-C0-0011. The
ideas and opinions expressed in this Digest do not necessarily reflect the positions or
policies of OERI, ED, or the Clearinghouse. ERIC Digests are in the public domain and may be freely reproduced.
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?" - http://www.wcer.wisc.edu/cpre/teachercomp/tchrcomp/whychange.htm
-----. "Questions and Answers on Teacher Compensation and Skills-Based Pay." - http://www.wcer.wisc.edu/cpre/teachercomp/project/tcanswers.htm
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. http://www.mff.org/
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,
American Federation of Teachers: http://www.aft.org/research/index.html
Consortium for Policy Research in Education at the University of Wisconsin-Madison: http://www.wcer.wisc.edu/cpre/
Education Week: http://www.educationweek.org/ew/ewstory.cfm?slug=04cincy.h20&keyword scompensation
National Board for Professional Teaching Standards: http://www.nbpts.org
National Commission on Teaching & America's Future: http://www.tc.columbia.edu/~teachcomm/
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